Lateral hypothalamic orexin/hypocretin circuits are required for stable consciousness: loss of orexin signals causes narcolepsy in humans, dogs and mice. While orexins activate deep cortical layers in mouse primary visual cortex (V1), their role for vision remains underexplored. On a behavioral/perceptual level, orexin knockout (KO) mice had normal visual acuity, but worse orientation discrimination, needing a larger angle difference to discriminate square wave patterns. Using the oddball paradigm, in which a stimulus is presented frequently (redundant context) or rarely (oddball context), we provide electrophysiological evidence suggesting disrupted V1 processing of visual signals in anaesthetized orexin KO mice. This includes delayed peaks of visually evoked potentials (VEP) and disruption of context dependent modulation of VEP waveform and power spectra. The cause for these impairments might be developmental in nature: Orexin KO mice showed extended survival of cortical subplate cells and altered development of layer 6 during early postnatal development. As orexins were previously shown to specifically activate deep cortical layers, which drive high gamma brain states favorable for plasticity, but that are lost in orexin KO mice, here we further tested whether orexin KO would impair plasticity during development. Indeed, orexin KO disrupted monocular deprivation induced ocular dominance plasticity specifically during the late critical period for visual circuit development, suggesting disruption of experience-dependent plasticity of V1 circuits during this paradigm. Together our data show that loss of orexin peptides affects development of visual circuits, and causes deficits in visual perception, processing and plasticity.