Cortical gamma oscillations are generated in circuits that include excitatory (E) and inhibitory (I) neurons. Prominent MEG/EEG gamma oscillations in visual cortex can be induced by static or moving high-contrast edges stimuli. In a previous study in children, we observed that increasing velocity of visual motion substantially accelerated gamma oscillations, and led to the suppression of gamma response magnitude. These velocityrelated modulations might reflect the balance between neural excitation induced by increasing excitatory drive, and efficacy of inhibition.Here, we searched for functional correlates of visual gamma modulations and assessed their development in 75 typically developing individuals aged 7-40 years. Gamma oscillations were measured with MEG in response to high-contrast annular gratings drifting at 1.2, 3.6, or 6.0°/s. In adults, we also recorded pupillary constriction as an indirect measure of excitatory drive.Pupil constriction increased with increasing velocity, thus suggesting increased excitatory drive to the cortex. Despite drastic developmental changes in gamma frequency and response strength, the magnitude of the velocity-related gamma modulations -a shift to higher frequency and amplitude suppression -remained remarkably stable. Based on the previous simulation studies, we hypothesized that gamma suppression might result from excessively strong excitatory drive caused by increasing motion velocity and reflects a tradeoff between overexcited excitatory and inhibitory circuitry. In children, the stronger gamma suppression correlated with higher IQ, suggesting importance of an optimal E/I balance for cognitive functioning.The velocity-related changes in gamma response may appear useful to assess E/I balance in the visual cortex.