A key emergent property of the primary visual cortex (V1) is the orientation selectivity of its neurons. Recent experiments demonstrate remarkable bottom-up and top-down plasticity in orientation networks of the adult cortex. The basis for such dynamics is the mechanism by which orientation tuning is created and maintained, by integration of thalamocortical and intracortical inputs. Intracellular measurements of excitatory and inhibitory synaptic conductances reveal that excitation and inhibition balance each other at all locations in the cortex. This balance is particularly critical at pinwheel centers of the orientation map, where neurons receive intracortical input from a wide diversity of local orientations. The orientation tuning of neurons in adult V1 changes systematically after short-term exposure to one stimulus orientation. Such reversible physiological shifts in tuning parallel the orientation tilt aftereffect observed psychophysically. Neurons at or near pinwheel centers show pronounced changes in orientation preference after adaptation with an oriented stimulus, while neurons in iso-orientation domains show minimal changes. Neurons in V1 of alert, behaving monkeys also exhibit short-term orientation plasticity after very brief adaptation with an oriented stimulus, on the time scale of visual fixation. Adaptation with stimuli that are orthogonal to a neuron's preferred orientation does not alter the preferred orientation but sharpens orientation tuning. Thus, successive fixation on dissimilar image patches, as happens during natural vision, combined with mechanisms of rapid cortical plasticity, actually improves orientation discrimination. Finally, natural vision involves judgements about where to look next, based on an internal model of the visual world. Experiments in behaving monkeys in which information about future stimulus locations can be acquired in one set of trials but not in another demonstrate that V1 neurons signal the acquisition of internal representations. Such Bayesian updating of responses based on statistical learning is fundamental for higher level vision, for deriving inferences about the structure of the visual world, and for the regulation of eye movements.