Stimulus discrimination depends on the selectivity and variability of neural responses, as well as the size and correlation structure of the responsive population. For direction discrimination in visual cortex, only the selectivity of neurons has been well characterized across development. Here we show in ferrets that at eye opening, the cortical response to visual stimulation exhibits several immaturities, including a high density of active neurons that display prominent wave-like activity, a high degree of variability and strong noise correlations. Over the next three weeks, the population response becomes increasingly sparse, wave-like activity disappears, and variability and noise correlations are markedly reduced. Similar changes were observed in identified neuronal populations imaged repeatedly over days. Furthermore, experience with a moving stimulus was capable of driving a reduction in noise correlations over a matter of hours. These changes in variability and correlation contribute significantly to a marked improvement in direction discriminability over development.