Individual neurons in visual cortex provide the brain with unreliable estimates of visual features. It is not known if the single-neuron variability is correlated across large neural populations, thus impairing the global encoding of stimuli. We recorded simultaneously from up to 50,000 neurons in mouse primary visual cortex (V1) and in higher-order visual areas and measured stimulus discrimination thresholds of 0.35 degrees and 0.37 degrees respectively in an orientation decoding task. These neural thresholds were almost 100 times smaller than the behavioral discrimination thresholds reported in mice. This discrepancy could not be explained by stimulus properties or arousal states. Furthermore, the behavioral variability during a sensory discrimination task could not be explained by neural variability in primary visual cortex. Instead behavior-related neural activity arose dynamically across a network of non-sensory brain areas. These results imply that sensory perception in mice is limited by downstream decoders, not by neural noise in sensory representations.