While connections between inhibitory interneurons are common circuit elements, it has been difficult to define their signal processing roles because of the inability to activate these circuits using natural stimuli. We overcame this limitation by studying connections between inhibitory amacrine cells in the retina. These interneurons form spatially extensive inhibitory networks that shape signaling between bipolar cell relay neurons to ganglion cell output neurons. We investigated how amacrine cell networks modulate these retinal signals by selectively activating the networks with spatially defined light stimuli. The roles of amacrine cell networks were assessed by recording their inhibitory synaptic outputs in bipolar cells that suppress bipolar cell output to ganglion cells. When the amacrine cell network was activated by large light stimuli, the inhibitory connections between amacrine cells unexpectedly depressed bipolar cell inhibition. Bipolar cell inhibition elicited by smaller light stimuli or electrically activated feedback inhibition was not suppressed because these stimuli did not activate the connections between amacrine cells. Thus the activation of amacrine cell circuits with large light stimuli can shape the spatial sensitivity of the retina by limiting the spatial extent of bipolar cell inhibition. Because inner retinal inhibition contributes to ganglion cell surround inhibition, in part, by controlling input from bipolar cells, these connections may refine the spatial properties of the retinal output. This functional role of interneuron connections may be repeated throughout the CNS.