Gamma band rhythms may synchronize distributed cell assemblies to facilitate information transfer within and across brain areas, yet their underlying mechanisms remain hotly debated. Most circuit models postulate that soma-targeting parvalbumin-positive GABAergic neurons are the essential inhibitory neuron subtype necessary for gamma rhythms. Using cell-type-specific optogenetic manipulations in behaving animals, we show that dendrite-targeting somatostatin (SOM) interneurons are critical for a visually induced, context-dependent gamma rhythm in visual cortex. A computational model independently predicts that context-dependent gamma rhythms depend critically on SOM interneurons. Further in vivo experiments show that SOM neurons are required for long-distance coherence across the visual cortex. Taken together, these data establish an alternative mechanism for synchronizing distributed networks in visual cortex. By operating through dendritic and not just somatic inhibition, SOM-mediated oscillations may expand the computational power of gamma rhythms for optimizing the synthesis and storage of visual perceptions.