Alterations in the visual system may underlie visual hallucinations in dementia with Lewy bodies (DLB). However, cortical excitability as measured by transcranial magnetic stimulation (TMS) and functional magnetic resonance imaging (fMRI) activation of lower visual areas (V1-3) to visual stimuli appear normal in DLB. We explored the relationship between TMS-determined phosphene threshold and fMRI-related visual activation and found a positive relationship between the two in controls but a negative one in DLB. This double dissociation suggests a loss of inhibition in the visual system in DLB, which may predispose individuals to visual dysfunction and visual hallucinations.