Caffeine is a widely used psychostimulant that is associated with increased acetylcholine levels in mammalian brain and acetycholinesterase antagonism. Acetylcholine, a neuromodulator, plays an important role in the processing of visual information. One key example in human vision, thought to at least partly involve cholinergic neuromodulation, is perceptual surround suppression of contrast, whereby the perceived contrast of a pattern is altered by the presence of a neighbouring pattern. Perceptual surround suppression is weaker with pharmacological administration of donepezil (a centrally-acting acetylcholine enzyme inhibitor) in healthy human observers. Here, we test whether temporarily manipulating caffeine levels (from complete washout to a controlled dose of caffeine) has a similar effect on perceptual surround suppression in 21 healthy young adults (aged 20-24 years, 11 females). Neither ingestion of a caffeine pill nor placebo altered contrast judgments when the target pattern was presented on a uniform grey background ( p=0.54). With caffeine ingestion, perceptual surround suppression strength was reduced relative to baseline (prior to pill ingestion, p=0.003) and placebo ( p=0.029), irrespective of whether the surround was oriented parallel or orthogonal to the central target. While daily habitual caffeine consumption of low-to-moderate doses (<400 mg/day, estimated from a written questionnaire) is not predictive of performance, our study indicates that acute consumption of caffeine on the day of testing influences perceptual surround suppression strength. Perceptual surround suppression is predominantly attributed to inhibitory processes involving the major cortical inhibitory neurotransmitter, gamma-aminobutyric acid. Our results point to the involvement of other neuromodulators, possibly cholinergic, in perceptual surround suppression.