Surround suppression (SS) is a phenomenon that a neuron's response to visual stimuli within the classical receptive field (cRF) is suppressed by a concurrent stimulation in the surrounding receptive field (sRF) beyond the cRF. Studies show that SS affects neuronal response contrast sensitivity in the primary visual cortex (V1). However, the underlying mechanisms remain unclear. Here, we examined SS effect on the contrast sensitivity of cats' V1 neurons with different preferred SFs using external noise-masked visual stimuli and perceptual template model (PTM) analysis at the system level. The contrast sensitivity was evaluated by the inverted threshold contrast of neurons in response to circular gratings of different contrasts in the cRF with or without an annular grating in the sRF. Our results showed that SS significantly reduced the contrast sensitivity of cats' V1 neurons. The SS-induced reduction of contrast sensitivity was not correlated with SS strength but was dependent on neuron's preferred SF, with a larger reduction for neurons with low preferred SFs than those with high preferred SFs. PTM analysis of threshold versus external noise contrast (TvC) functions indicated that SS decreased contrast sensitivity by increasing both the internal additive noise and impact of external noise for neurons with low preferred SFs, but improving only internal additive noise for neurons with high preferred SFs. Furthermore, the SS effect on the contrast-response function of low- and high-SF neurons also exhibited different mechanisms in contrast gain and response gain. Collectively, these results suggest that the mechanisms of SS effect on neuronal contrast sensitivity may depend on neuronal populations with different SFs.