In the primary visual cortex (V1), the responses of neurons to stimuli presented in their classical receptive fields (CRFs) are modulated by another stimulus concurrently presented in their surround (receptive field surround, SRF). We studied the nature of the modulatory effects of SRF stimulation with respect to stimulus contrast in cat V1. In 51 V1 neurons studied, large SRF stimuli (40° × 30°) induced only the suppression of responses to CRF stimulation and the suppressive effects became stronger as the contrast for SRF stimulation increased. The contrast sensitivity of SRF suppression did not correlate with that of CRF responses. By independently controlling contrast of CRF and SRF stimuli, we studied whether SRF effects vary with CRF response magnitude. Increasing contrast for CRF stimulation caused an upward shift of the range of effective contrasts for SRF stimulation, indicating that a high contrast for SRF stimulation is required for suppressing strong responses to CRF stimulation at high contrasts. To assess the possible origin of the suppressive SRF effect on V1 neurons, we also investigated the contrast dependency of SRF effects in 28 neurons from the lateral geniculate nucleus. Our results suggest that SRF effects obtained at the subcortical level strongly contribute to those in V1. Taken together, we conclude that along the thalamocortical projections, SRF modulation exhibits a gain-control mechanism that scales the suppressive SRF effect depending on the contrast for CRF stimulation. In addition, SRF effects can be facilitatory at low stimulus contrasts potentially due to the enlargement of the summation field.