Binocularity is a key property of primary visual cortex (V1) neurons that is widely used to study synaptic integration in the brain and plastic mechanisms following an altered visual experience. However, it is not clear how the inputs from the two eyes converge onto binocular neurons, and how their interaction is modified by an unbalanced visual drive. Here, using visual evoked potentials recorded in the juvenile rat V1, we report evidence for a suppressive mechanism by which contralateral eye activity inhibits responses from the ipsilateral eye. Accordingly, we found a lack of additivity of the responses evoked independently by the two eyes in the V1, and acute silencing of the contralateral eye resulted in the enhancement of ipsilateral eye responses in cortical neurons. We reverted the relative cortical strength of the two eyes by suturing the contralateral eye shut [monocular deprivation (MD)]. After 7 days of MD, there was a loss of interocular suppression mediated by the contralateral, deprived eye, and weak inputs from the closed eye were functionally inhibited by interhemispheric callosal pathways. We conclude that interocular suppressive mechanisms play a crucial role in shaping normal binocularity in visual cortical neurons, and a switch from interocular to interhemispheric suppression represents a key step in the ocular dominance changes induced by MD. These data have important implications for a deeper understanding of the key mechanisms that underlie activity-dependent rearrangements of cortical circuits following alteration of sensory experience.