ABSTRACT: The Chevreul illusion is a well-known 19(th) century brightness illusion, comprising adjacent homogeneous grey bands of different luminance, which are perceived as inhomogeneous. It is generally explained by lateral inhibition, according to which brighter areas projected to the retina inhibit the sensitivity of neighbouring retinal areas. Lateral inhibition has been considered the foundation-stone of early vision for a century, upon which several computational models of brightness perception are built. One of the last strongholds of lateral inhibition is the Chevreul illusion, which is often illustrated even in current textbooks. Here we prove that lateral inhibition is insufficient to explain the Chevreul illusion. For this aim, we placed the Chevreul staircase in a luminance ramp background, which noticeably changed the illusion. In our psychophysical experiments, all 23 observers reported a strong illusion, when the direction of the ramp was identical to that of the staircase, and all reported homogeneous steps (no illusion) when its direction was the opposite. When the background of the staircase was uniform, 14 saw the illusion, and 9 saw no illusion. To see whether the change of the entire background area or that of the staircase boundary edges were more important, we placed another ramp around the staircase, whose direction was opposite to that of the original, larger ramp. The result is that though the inner ramp is rather narrow (mean?=?0.51 deg, SD?=?0.48 deg, N?=?23), it still dominates perception. Since all conditions of the lateral inhibition account were untouched within the staircase, lateral inhibition fails to model these perceptual changes. Area ratios seem insignificant; the role of boundary edges seems crucial. We suggest that long range interactions between boundary edges and areas enclosed by them, such that diffusion-based models describe, provide a much more plausible account for these brightness phenomena, and local models are insufficient.