Luminance and contrast adaptation are neuronal mechanisms employed by the visual system to adjust our sensitivity to light. They are mediated by an assortment of cellular and network processes distributed across the retina and visual cortex. Both have been demonstrated in the eyes of many vertebrates, but only luminance adaptation has been shown in invertebrate eyes to date. Since the computational benefits of contrast adaptation should apply to all visual systems, we investigated whether this mechanism operates in horseshoe crab eyes, one of the best-understood neural networks in the animal kingdom. The spike trains of optic nerve fibers were recorded in response to light stimuli modulated randomly in time and delivered to single ommatidia or the whole eye. We found that the retina adapts to both the mean luminance and contrast of a white-noise stimulus, that luminance- and contrast-adaptive processes are largely independent, and that they originate within an ommatidium. Network interactions are not involved. A published computer model that simulates existing knowledge of the horseshoe crab eye did not show contrast adaptation, suggesting that a heretofore unknown mechanism may underlie the phenomenon. This mechanism does not appear to reside in photoreceptors because white-noise analysis of electroretinogram recordings did not show contrast adaptation. The likely site of origin is therefore the spike discharge mechanism of optic nerve fibers. The finding of contrast adaption in a retinal network as simple as the horseshoe crab eye underscores the broader importance of this image processing strategy to vision.