The electroencephalographic/magnetoencephalographic (EEG/MEG) signal is generated primarily by the summation of the postsynaptic currents of cortical principal cells. At a microcircuit level, these glutamatergic principal cells are reciprocally connected to GABAergic interneurons. Here we investigated the relative sensitivity of visual evoked and induced responses to altered levels of endogenous GABAergic inhibition. To do this, we pharmacologically manipulated the GABA system using tiagabine, which blocks the synaptic GABA transporter 1, and so increases endogenous GABA levels. In a single-blinded and placebo-controlled crossover study of 15 healthy participants, we administered either 15 mg of tiagabine or a placebo. We recorded whole-head MEG, while participants viewed a visual grating stimulus, before, 1, 3 and 5 h post tiagabine ingestion. Using beamformer source localization, we reconstructed responses from early visual cortices. Our results showed no change in either stimulus-induced gamma-band amplitude increases or stimulus-induced alpha amplitude decreases. However, the same data showed a 45% reduction in the evoked response component at ∼80 ms. These data demonstrate that, in early visual cortex the evoked response shows a greater sensitivity compared with induced oscillations to pharmacologically increased endogenous GABA levels. We suggest that previous studies correlating GABA concentrations as measured by magnetic resonance spectroscopy to gamma oscillation frequency may reflect underlying variations such as interneuron/inhibitory synapse density rather than functional synaptic GABA concentrations.