Adapting to sinusoidal gratings selectively reduces contrast sensitivity to subsequent test stimuli. To investigate the perceptual processes underlying selective adaptation, we developed an external noise plus adaptation paradigm and a theoretical framework based on a noisy observer model (the contrast-gain-control Perceptual Template Model [cgcPTM]). After adapting to a 45 deg, 2-Hz counter-flickering sine grating of 0.8 contrast, observers performed two-interval forced-choice detection of Gabors of matched spatial frequency, tilted at either 45 or 135 deg and embedded in one of six levels of white external noise (Experiment 1) or embedded in orientation band-pass-filtered external noise (Experiment 2). On the basis of the cgcPTM, we found that adaptation selectively reduced the contrast gain of the perceptual template at the adapted spatial frequency and orientation without altering either pre- or post-gain-control (additive and multiplicative) noises or changing transducer nonlinearity. Modeled as notches on the perceptual templates, the estimated full orientation bandwidth of adaptation at half height was about 8.3 deg.