In visual perception, an effect known as surround suppression occurs wherein the apparent contrast of a center stimulus is reduced when it is presented within a higher-contrast surrounding stimulus. Many key aspects of visual perception involve surround suppression, yet the neuromodulatory processes involved remain unclear. Psilocybin is a serotonergic psychedelic compound known for its robust effects on visual perception, particularly texture, color, object, and motion perception. We asked whether surround suppression is altered under peak effects of psilocybin. Using a contrast-matching task with different center-surround stimulus configurations, we measured surround suppression after 25mg of psilocybin compared with placebo (100mg niacin). Data on harms were collected, and no serious adverse events were reported. After taking psilocybin, participants (n = 6) reported stronger surround suppression of perceived contrast compared to placebo. Furthermore, we found that the intensity of subjective psychedelic visuals induced by psilocybin correlated positively with the magnitude of surround suppression. We note the potential relevance of our findings for the field of psychiatry, given that studies have demonstrated weakened visual surround suppression in both major depressive disorder and schizophrenia. Our findings are thus relevant to understanding the visual effects of psilocybin, and the potential mechanisms of visual disruption in mental health disorders.