In amblyopia, abnormal visual experience during development leads to an enduring loss of visual acuity in adulthood. Physiological studies in animal models suggest that intracortical GABAergic inhibition may mediate visual deficits in amblyopia. To better understand the relationship between visual cortical γ-aminobutyric acid (GABA) and perceptual suppression in persons with amblyopia (PWA), we employed magnetic resonance spectroscopy (MRS) to quantify GABA levels in both PWA and normally-sighted persons (NSP). In the same individuals, we obtained psychophysical measures of perceptual suppression for a variety of ocular configurations. In PWA, we found a robust negative correlation between the depth of amblyopia (the difference in visual acuity between the amblyopic and non-amblyopic eyes) and GABA concentration that was specific to visual cortex and was not observed in a sensorimotor cortical control region. Moreover, lower levels of visual cortical GABA were associated with weaker perceptual suppression of the fellow eye by the amblyopic eye and stronger suppression of the amblyopic eye by the fellow eye. Taken together, our findings provide evidence that intracortical GABAergic inhibition is an important component of the pathology of human amblyopia and suggest possible therapeutic interventions to restore vision in the amblyopic eye through enhancement of visual cortical GABAergic signaling in PWA.