More than 50 years ago, Hubel and Wiesel identified a subpopulation of geniculate magnocellular (M) neurons that are suppressed by diffuse red light. Since then, many human psychophysical studies have used red and green backgrounds to study the effects of M suppression on visual task performance, as a means to better understand neurodevelopmental disorders such as dyslexia and schizophrenia. Few of these studies have explicitly assessed the relative effects of red backgrounds on the M and P (parvocellular) pathways. Here we compared the effects of red and green diffuse background illumination on well-accepted cortical M and P signatures, both physiologically through nonlinear analysis of visual evoked potentials (VEPs; N = 15), and psychophysically through pulsed and steady pedestal perceptual thresholds (N = 9 with gray pedestals and N = 8 with colored pedestals). Red surrounds reduced P-generated temporal nonlinearity in the VEPs, but they did not influence M-generated VEP signatures. The steady and pulsed pedestal results suggest that red surrounds can have different effects on M and P contrast sensitivities, depending on whether the target is colored gray or red, presented centrally or peripherally, or whether it is brighter or dimmer than the surround. Our results highlight difficulties in interpreting the effects of red backgrounds on human VEPs or perception in terms of M specific suppression.