Binocular rivalry properties for contrast-modulated (CM) gratings were examined to gain insight into their locus of processing. Two orthogonally orientated gratings were presented, one to each eye. Perceptual change rates, proportions of exclusivity and mixed percepts, and mean durations were calculated. Stimuli were noiseless luminance-defined (L), luminance-modulated noise (LM) and contrast-modulated noise (CM) gratings with sizes of 1, 2 and 4 deg and spatial frequencies of 4, 2 and 1 c/deg, respectively. For the LM and CM gratings, binary noise was fully correlated between eyes. Maximum producible modulations were used (1.0 for CM, 0.78 for LM and 0.98 for L stimuli). In a control experiment, contrasts of LM gratings were reduced until the multiples over detection threshold were similar to those of CM stimuli. Trial durations of 120 s were analyzed. Exclusive visibility decreased with increasing stimulus size regardless of the stimulus type. Even with visibilities at similar multiples above detection threshold, significantly lower proportions of exclusive percepts and perceptual changes were found for CM, compared to LM gratings. The results obtained with dichoptically presented orthogonal CM gratings are significantly different from those obtained for orthogonal gratings presented to one eye. CM stimuli therefore do engage in binocular rivalry but with different characteristics to those found for LM stimuli. These results suggest that CM stimuli are processed by a mechanism that promotes binocular combination rather than rivalry, and therefore may involve cells in a higher visual area than those that initially process LM information.