Color vision is most beneficial when the visual system is color constant and can correct the excitations of photoreceptors for differences in environmental irradiance. A phenomenon related to color constancy is color induction, where the color of an object shifts away from the color of its surroundings. These two phenomena depend on chromatic spatial integration, which was suggested to originate at the feedback synapse from horizontal cells (HC) to cones. However, the exact retinal site was never determined. Using the electroretinogram and compound action potential recordings, we estimated the spectral sensitivity of the photoresponse of cones, the output of cones, and the optic nerve in rainbow trout. Recordings were performed before and following pharmacological inhibition of HC-cone feedback, and were repeated under two colored backgrounds to estimate the efficiency of color induction. No color induction could be detected in the photoresponse of cones. However, the efficiency of color induction in the cone output and optic nerve was substantial, with the efficiency in the optic nerve being significantly higher than in the cone output. We found that the efficiency of color induction in the cone output and optic nerve decreased significantly with the inhibition of HC-cone feedback. Therefore, our findings suggest not only that color induction originates as a result of HC-cone feedback, but also that this effect of HC-cone feedback is further amplified at downstream retinal elements, possibly through feedback mechanisms at the inner plexiform layer. This study provides evidence for an important role of HC-cone feedback in mediating color induction, and therefore, likely also in mediating color constancy.