Drop retraction methods are popular means of measuring the interfacial tension between immiscible polymers. Experiments show that two different drop retraction methods, imbedded fiber retraction (IFR) and deformed drop retraction (DDR), give inconsistent results when a surfactant is present on the surface of the drop. These inconsistencies are deemed to be due to dilution of the surfactant and due to gradients in interfacial concentration of surfactant along the drop surface. This physical picture is quantified for the simple case of a Newtonian drop in a Newtonian matrix, with an insoluble, nondiffusive surfactant at the interface. The drop is deformed in computational fluid dynamics simulations by shearing the matrix, and then allowed to retract. Dilution and interfacial tension gradients effects are found to be especially large at the early stages of retraction, making IFR unsuitable for measuring the interfacial tension of surfactant-laden interfaces. The effects of surfactant dilution and gradients are found to persist even at late stages of retraction, causing the DDR method to underestimate the equilibrium interfacial tension significantly. The largest underestimates occur when the drop viscosity is lower than the matrix viscosity. (C) 2003 Elsevier Inc. All rights reserved.