The responses of neurons in mouse primary visual cortex (V1) to visual stimuli depend on behavioral states. Specifically, surround suppression is reduced during locomotion. Although locomotion-induced vasoactive intestinal polypeptide positive (VIP) interneuron depolarization can account for the reduction of surround suppression, the functions of VIP cell depolarization are not fully understood. Here we utilize a firing rate model and a computational model to elucidate the potential functions of VIP cell depolarization during locomotion. Our analyses suggest 1) that surround suppression sharpens the visual responses in V1 to a stationary scene, 2) that depolarized VIP cells enhance V1 responses to moving objects by reducing self-generated surround suppression and 3) that during locomotion V1 neuron responses to some features of the moving objects can be selectively enhanced. Thus, VIP cells regulate surround suppression to allow pyramidal neurons to optimally encode visual information independent of behavioral state.