Understanding the function of modulatory interneuron networks is a major challenge, because such networks typically operate over long spatial scales and involve many neurons of different types. Here, we use an indirect electrical imaging method to reveal the function of a spatially extended, recurrent retinal circuit composed of two cell types. This recurrent circuit produces peripheral response suppression of early visual signals in the primate magnocellular visual pathway. We identify a type of polyaxonal amacrine cell physiologically via its distinctive electrical signature, revealed by electrical coupling with ON parasol retinal ganglion cells recorded using a large-scale multi-electrode array. Coupling causes the amacrine cells to fire spikes that propagate radially over long distances, producing GABA-ergic inhibition of other ON parasol cells recorded near the amacrine cell axonal projections. We propose and test a model for the function of this amacrine cell type, in which the extra-classical receptive field of ON parasol cells is formed by reciprocal inhibition from other ON parasol cells in the periphery, via the electrically coupled amacrine cell network.