The neuronal mechanisms underlying perceptual grouping of discrete, similarly oriented elements are not well understood. To investigate this, we measured neural population responses using voltage-sensitive dye imaging in V1 of monkeys trained on a contour-detection task. By mapping the contour and background elements onto V1, we could study their neural processing. Population response early in time showed activation patches corresponding to the contour/background individual elements. However, late increased activity in the contour elements, along with suppressed activity in the background elements, enabled us to visualize in single trials a salient continuous contour "popping out" from a suppressed background. This modulated activity in the contour and in background extended beyond the cortical representation of individual contour or background elements. Finally, the late modulation was correlated with behavioral performance of contour saliency and the monkeys' perceptual report. Thus, opposing responses in the contour and background may underlie perceptual grouping in V1.