Phosphenes are illusory visual percepts produced by the application of transcranial magnetic stimulation to occipital cortex. Phosphene thresholds, the minimum stimulation intensity required to reliably produce phosphenes, are widely used as an index of cortical excitability. However, the neural basis of phosphene thresholds and their relationship to individual differences in visual cognition are poorly understood. Here, we investigated the neurochemical basis of phosphene perception by measuring basal GABA and glutamate levels in primary visual cortex using magnetic resonance spectroscopy. We further examined whether phosphene thresholds would relate to the visuospatial phenomenology of grapheme-color synesthesia, a condition characterized by atypical binding and involuntary color photisms. Phosphene thresholds negatively correlated with glutamate concentrations in visual cortex, with lower thresholds associated with elevated glutamate. This relationship was robust, present in both controls and synesthetes, and exhibited neurochemical, topographic, and threshold specificity. Projector synesthetes, who experience color photisms as spatially colocalized with inducing graphemes, displayed lower phosphene thresholds than associator synesthetes, who experience photisms as internal images, with both exhibiting lower thresholds than controls. These results suggest that phosphene perception is driven by interindividual variation in glutamatergic activity in primary visual cortex and relates to cortical processes underlying individual differences in visuospatial awareness.