The ability to discriminate between similar sensory stimuli relies on the amount of information encoded in sensory neuronal populations. Such information can be substantially reduced by correlated trial-to-trial variability. Noise correlations have been measured across a wide range of areas in the brain, but their origin is still far from clear. Here we show analytically and with simulations that optimal computation on inputs with limited information creates patterns of noise correlations that account for a broad range of experimental observations while at same time causing information to saturate in large neural populations. With the example of a network of V1 neurons extracting orientation from a noisy image, we illustrate to our knowledge the first generative model of noise correlations that is consistent both with neurophysiology and with behavioral thresholds, without invoking suboptimal encoding or decoding or internal sources of variability such as stochastic network dynamics or cortical state fluctuations. We further show that when information is limited at the input, both suboptimal connectivity and internal fluctuations could similarly reduce the asymptotic information, but they have qualitatively different effects on correlations leading to specific experimental predictions. Our study indicates that noise at the sensory periphery could have a major effect on cortical representations in widely studied discrimination tasks. It also provides an analytical framework to understand the functional relevance of different sources of experimentally measured correlations.noise correlations | information theory | neural computation | efficient coding | neuronal variability T he response of cortical neurons to an identical stimulus varies from trial to trial. Moreover, this variability tends to be correlated among pairs of nearby neurons. These correlations, known as noise correlations, have been the subject of numerous experimental as well as theoretical studies because they can have a profound impact on behavioral performance (1-7). Indeed, behavioral performance in discrimination tasks is inversely proportional to the Fisher information available in the neural responses, which itself is strongly dependent on the pattern of correlations. In particular, correlations can strongly limit information in the sense that some patterns of correlations can lead information to saturate to a finite value in large populations, in sharp contrast to the case of independent neurons for which information grows proportionally to the number of neurons. However, the saturation is observed for only one type of correlations known as differential correlations. If the correlation pattern slightly deviates from differential correlations, information typically scales with the number of neurons, just like it does for independent neurons (7). These previous results clarify how correlations impact information and consequently behavioral performance but fail to address another fundamental question, namely, Where do noise correlations, and in...