Alzheimer's disease (AD) is often associated with declined visual processing abilities. Here we tested whether the functions of center-surround suppression- a hallmark property in the visual system- are altered by AD. To this end, we recruited three groups of participants (AD, elderly, and young) in a motion direction discrimination task, in which we measured the temporal duration threshold of a  drifting Gabor with varying stimulus sizes. We first replicated the phenomena of center-surround suppression that the required duration for discriminating a high contrast grating decreases with increasing stimulus size. We then showed that the magnitudes of suppression varied among the three groups. There was progressive reduction of suppression in the elderly and AD groups compared with the young group. Interestingly, we found that the levels of suppression can predict the severity of dementia in the AD group. Our results suggest that AD is associated with impaired center-surround functions in the visual motion processing pathway.