In an attempt to demonstrate a physiological basis for the alternating suppression of perception when the two eyes view very different contours (binocular rivalry), we studied the responses of neurons in the lateral geniculate nucleus (LGN) and area 17 of cats for drifting gratings of different orientation, spatial frequency and contrast in the two eyes. Almost half of the LGN neurons studied exhibited modest inhibitory interocular interaction, but independent of interocular differences in orientation. Monocularly driven units in layer 4 of area 17 behaved similarly. However, for the majority of binocular cortical cells, the response to a grating of optimal orientation in one eye was suppressed by a grating of very different orientation shown to the other eye, over a wide range of spatial frequency and independent of relative spatial phase. This interocular suppression exhibits a remarkable non-linearity: a grating of non-preferred orientation in one eye causes significant interocular suppression only if the neuron is already responding to an appropriate stimulus in the other eye [Sengpiel and Blakemore (1994) Nature, 368, 847-850]. We propose that the switches in perceptual dominance during binocular rivalry depend on interocular interactions at the level of binocular neurons of the primary visual cortex, which might involve intracortical inhibition between adjacent ocular dominance columns. The spontaneous alternations in perceptual suppression that occur during prolonged viewing of rivalrous patterns remain to be explained, although significant variation in the strength of neuronal suppression in such conditions was occasionally seen.