Binocular vision is created by fusing the separate inputs arriving from the left and right eyes. 'Eye dominance' provides a measure of the perceptual dominance of one eye over the other. Theoretical models suggest that eye dominance is related to reciprocal inhibition between monocular units in the primary visual cortex, the first location where the binocular input is combined. As the specific inhibitory interactions in the binocular visual system critically depend on the presence of visual input, we sought to test the role of inhibition by measuring the inhibitory neurotransmitter GABA during monocular visual stimulation of the dominant and the non-dominant eye. GABA levels were measured in a single volume of interest in the early visual cortex, including V1 from both hemispheres, using a combined functional magnetic resonance imaging and magnetic resonance spectroscopy (combined fMRI-MRS) sequence on a 7-Tesla MRI scanner. Individuals with stronger eye dominance had a greater difference in GABAergic inhibition between the eyes. This relationship was present only when the visual system was actively processing sensory input and was not present at rest. We provide the first evidence that imbalances in GABA levels during ongoing sensory processing are related to eye dominance in the human visual cortex. Our finding supports the view that intracortical inhibition underlies normal eye dominance.