The data presented in this paper examine the ability of observers to detect a modulation in the contrast of chromatic and luminance gratings as a function of the carrier contrast, duration, and spatial frequency. The nature of the signal underlying this ability is investigated by examining both the paradigm used to make the measurement and the effect of grating masks on performance in the tasks. The results show that observers' ability to discriminate amplitude modulation from an unmodulated carrier is dependent on carrier contrast but only up to approximately 5-8 times carrier-detection threshold. Discrimination is, however, independent of spatial frequency [10-1 cycles per degree (cpd) component-frequency range], carrier color, and, most surprisingly, stimulus duration (1000-30 ms). This set of experiments compliments data from previous papers and assimilates many of the conclusions drawn from this previous data. There is absolutely no evidence for the existence of a distortion product mediating performance under any of the current conditions, and the data seriously question whether the visual system might use such a signal even if it does exist under more extreme conditions than those used here. The evidence suggests that the visual system detects variations in both chromatic and luminance contrast by means of a mechanism operating locally upon the spatial structure of the carrier.