Stimulus-induced gamma oscillations in the 30-80 Hz range have been implicated in a wide number of functions including visual processing, memory and attention. While occipital gamma-band oscillations can be pharmacologically modified in animal preparations, pharmacological modulation of stimulus-induced visual gamma oscillations has yet to be demonstrated in non-invasive human recordings. Here, in fifteen healthy humans volunteers, we probed the effects of the GABAA agonist and sedative propofol on stimulus-related gamma activity recorded with magnetoencephalography, using a simple visual grating stimulus designed to elicit gamma oscillations in the primary visual cortex. During propofol sedation as compared to the normal awake state, a significant 60% increase in stimulus-induced gamma amplitude was seen together with a 94% enhancement of stimulus-induced alpha suppression and a simultaneous reduction in the amplitude of the pattern-onset evoked response. These data demonstrate, that propofol-induced sedation is accompanied by increased stimulus-induced gamma activity providing a potential window into mechanisms of gamma-oscillation generation in humans.