Abnormal sensory processing has been observed in autism, including superior visual motion discrimination, but the neural basis for these sensory changes remains unknown. Leveraging well-characterized suppressive neural circuits in the visual system, we used behavioral and fMRI tasks to demonstrate a significant reduction in neural suppression in young adults with autism spectrum disorder (ASD) compared to neurotypical controls. MR spectroscopy measurements revealed no group differences in neurotransmitter signals. We show how a computational model that incorporates divisive normalization, as well as narrower top-down gain (that could result, for example, from a narrower window of attention), can explain our observations and divergent previous findings. Thus, weaker neural suppression is reflected in visual task performance and fMRI measures in ASD, and may be attributable to differences in top-down processing.