The effects of context on visual sensitivity are well established (e.g., sensitivity to luminance flicker is substantially higher on mean-gray surrounds than on white or black surrounds). The neural mechanisms generating context effects, however, remain unresolved. In the absence of direct tests, some theories invoke enhancement of edges by lateral inhibition, whereas others rely on transients caused by miniature eye movements that maintain fixation. We first replicated the luminance results on human observers and found unexpectedly that sensitivity to red-green flicker is also affected by surround color, being substantially higher on mean-gray surrounds than on red or green surrounds. To identify the neural bases of both context effects, we used in vivo electrophysiological recordings of primate magnocellular and parvocellular ganglion cell responses to luminance and red-green modulations, respectively. To test neuronal sensitivity to stationary edge contrast, neuronal responses were measured at various distances from the modulation edge against various surrounds. We found no evidence of enhanced responses to stationary edges on any surrounds, ruling out lateral inhibition-type explanations. To simulate the effects of eye movements, target patches were abruptly displaced while measuring responses. Abruptly displaced edges evoked vigorous transient responses that were selective for modulation-phase on mean-gray surrounds, but were phase-invariant on other surrounds. Eye movements could thus enhance detection of flicker on mean-gray surrounds, and neurometric analyses supported a primary role for eye movements in enhancing sensitivity. In addition, the transformation of spatial edges to transient neuronal responses by eye movements provides the signals for detecting luminance and color edges in natural scenes.