The existence of two classes of cells, simple and complex, discovered by Hubel and Wiesel in 1962, is one of the fundamental features of cat primary visual cortex. A quantitative measure used to distinguish simple and complex cells is the ratio between modulated and unmodulated components of spike responses to drifting gratings, an index that forms a bimodal distribution. We have found that the modulation ratio, when derived from the subthreshold membrane potential instead of from spike rate, is unimodally distributed, but highly skewed. The distribution of the modulation ratio as derived from spike rate can, in turn, be predicted quantitatively by the nonlinear properties of spike threshold applied to the skewed distribution of the subthreshold modulation ratio. Threshold also increases the spatial segregation of ON and OFF regions of the receptive field, a defining attribute of simple cells. The distinction between simple and complex cells is therefore enhanced by threshold, much like the selectivity for stimulus features such as orientation and direction. In this case, however, a continuous distribution in the spatial organization of synaptic inputs is transformed into two distinct classes of cells.