Grating induction causes a homogeneous test field surrounded by sinewave gratings to possess an induced counterphase grating [McCourt M. E. (1982). Vision Research, 22, 119]. There is currently no consensus about the stage of visual processing at which illusory phenomena such as simultaneous brightness contrast are signaled. We measured the masking efficacy of induced gratings by measuring contrast detection thresholds for targets (sinewave luminance gratings) added in phase to both real and induced gratings which were matched in apparent contrast. At spatial frequencies below c. 0.5 c/deg, target detection and discrimination were comparably facilitated by both real and induced low-contrast pedestals (0.5-2%). At higher spatial frequencies (above 1.0 c/deg) facilitation continued to be observed for targets added in-phase to real grating pedestals, but occurred only for targets added out-of-phase with induced pedestal gratings. Higher inducing frequencies by themselves were not responsible for the observed phase shift of facilitation, however, since both real and induced pedestals produced similar target contrast discrimination functions when inducing frequency was varied by manipulating viewing distance (which holds the ratio of inducing grating period and test field height constant). The results imply the existence of at least two types of lateral interactive processes: one producing in-phase facilitation, and a second producing out-of-phase facilitation. The relative contribution of each process depends upon the ratio of inducing grating period and test field height.