Single neurons in visual cortex provide unreliable measurements of visual features due to their high trial-to-trial variability. It is not known if this “noise” extends its effects over large neural populations to impair the global encoding of stimuli. We recorded simultaneously from ∼20,000 neurons in mouse primary visual cortex (V1) and found that the neural populations had discrimination thresholds of ∼0.34° in an orientation decoding task. These thresholds were nearly 100 times smaller than those reported behaviourally in mice. The discrepancy between neural and behavioural discrimination could not be explained by the types of stimuli we used, by behavioural states or by the sequential nature of perceptual learning tasks. Furthermore, higher-order visual areas lateral to V1 could be decoded equally well. These results imply that the limits of sensory perception in mice are not set by neural noise in sensory cortex, but by the limitations of downstream decoders.