Perceptual filling-in occurs when a blank patch in the periphery of a texture field perceptually disappears after sustained fixation. This process may be mediated by horizontal spreading of activity in the early visual cortex. To test this proposal, we assessed if the oblique effect and the surround suppression effect, known to modulate activity in early visual cortex, modulates filling-in. In a psychophysics and eye-tracking experiment, 63 participants reported filling-in while attending peripherally to a grey rectangle on a dynamic texture field. We varied the orientation of elements in the texture field (vertical, horizontal or oblique) and the orientation of the rectangular patch. In line with our expectations, we found more filling-in for cardinal orientations in the field than for obliques, and more filling-in for patches iso-oriented with the texture than for cross-oriented patches. We interpret these results as showing that filling-in is enhanced by a strong response to the background and a weak response along the patch boundary. These results are thereby in line with filling-in being mediated by horizontal spreading of activity in the low-level visual cortex. In addition, we found a decrease in microsaccade rate and a reduction in pupil size closely before filling-in onset. We interpret this pattern as showing that filling-in onset is induced by visual fading of the boundary and a change in possibly global or selective attention.