Neurons in mouse primary visual cortex (V1) are selective for particular properties of visual stimuli. Locomotion causes a change in cortical state that leaves their selectivity unchanged but strengthens their responses. Both locomotion and the change in cortical state are thought to be initiated by projections from the mesencephalic locomotor region, the latter through a disinhibitory circuit in V1. By recording simultaneously from a large number of single neurons in alert mice viewing moving gratings, we investigated the relationship between locomotion and the information contained within the neural population. We found that locomotion improved encoding of visual stimuli in V1 by two mechanisms. First, locomotion-induced increases in firing rates enhanced the mutual information between visual stimuli and single neuron responses over a fixed window of time. Second, stimulus discriminability was improved, even for fixed population firing rates, because of a decrease in noise correlations across the population. These two mechanisms contributed differently to improvements in discriminability across cortical layers, with changes in firing rates most important in the upper layers and changes in noise correlations most important in layer V. Together, these changes resulted in a threefold to fivefold reduction in the time needed to precisely encode grating direction and orientation. These results support the hypothesis that cortical state shifts during locomotion to accommodate an increased load on the visual system when mice are moving.SIGNIFICANCE STATEMENT This paper contains three novel findings about the representation of information in neurons within the primary visual cortex of the mouse. First, we show that locomotion reduces by at least a factor of 3 the time needed for information to accumulate in the visual cortex that allows the distinction of different visual stimuli. Second, we show that the effect of locomotion is to increase information in cells of all layers of the visual cortex. Third, we show that the means by which information is enhanced by locomotion differs between the upper layers, where the major effect is the increasing of firing rates, and in layer V, where the major effect is the reduction in noise correlations.