diff --git a/src/core/fullscreen_ui.cpp b/src/core/fullscreen_ui.cpp
index 4dd0ec3eb..4df84f591 100644
--- a/src/core/fullscreen_ui.cpp
+++ b/src/core/fullscreen_ui.cpp
@@ -3997,6 +3997,10 @@ void FullscreenUI::DrawDisplaySettingsPage()
                     FSUI_CSTR("Disables dithering and uses the full 8 bits per channel of color information."), "GPU",
                     "TrueColor", true, is_hardware);
 
+  DrawToggleSetting(bsi, FSUI_CSTR("True Color Debanding"),
+                    FSUI_CSTR("Applies modern dithering techniques to further smooth out gradients when true color is enabled."), "GPU",
+                    "Debanding", false, is_hardware);
+
   DrawToggleSetting(bsi, FSUI_CSTR("Widescreen Hack"),
                     FSUI_CSTR("Increases the field of view from 4:3 to the chosen display aspect ratio in 3D games."),
                     "GPU", "WidescreenHack", false, is_hardware);
diff --git a/src/core/gpu_hw.cpp b/src/core/gpu_hw.cpp
index 2ffdd333f..f76e611b0 100644
--- a/src/core/gpu_hw.cpp
+++ b/src/core/gpu_hw.cpp
@@ -212,6 +212,7 @@ bool GPU_HW::Initialize()
   m_supports_framebuffer_fetch = features.framebuffer_fetch;
   m_per_sample_shading = g_settings.gpu_per_sample_shading && features.per_sample_shading;
   m_true_color = g_settings.gpu_true_color;
+  m_debanding = g_settings.gpu_debanding;
   m_scaled_dithering = g_settings.gpu_scaled_dithering;
   m_texture_filtering = g_settings.gpu_texture_filter;
   m_clamp_uvs = ShouldClampUVs();
@@ -345,7 +346,7 @@ void GPU_HW::UpdateSettings(const Settings& old_settings)
       g_settings.gpu_downsample_scale != old_settings.gpu_downsample_scale));
   const bool shaders_changed =
     (m_resolution_scale != resolution_scale || m_multisamples != multisamples ||
-     m_true_color != g_settings.gpu_true_color || m_per_sample_shading != per_sample_shading ||
+     m_true_color != g_settings.gpu_true_color || m_debanding != g_settings.gpu_debanding || m_per_sample_shading != per_sample_shading ||
      m_scaled_dithering != g_settings.gpu_scaled_dithering || m_texture_filtering != g_settings.gpu_texture_filter ||
      m_clamp_uvs != clamp_uvs || m_chroma_smoothing != g_settings.gpu_24bit_chroma_smoothing ||
      m_downsample_mode != downsample_mode ||
@@ -395,6 +396,7 @@ void GPU_HW::UpdateSettings(const Settings& old_settings)
   m_multisamples = multisamples;
   m_per_sample_shading = per_sample_shading;
   m_true_color = g_settings.gpu_true_color;
+  m_debanding = g_settings.gpu_debanding;
   m_scaled_dithering = g_settings.gpu_scaled_dithering;
   m_texture_filtering = g_settings.gpu_texture_filter;
   m_clamp_uvs = clamp_uvs;
@@ -604,7 +606,7 @@ void GPU_HW::PrintSettingsToLog()
               VRAM_HEIGHT * m_resolution_scale, GetMaxResolutionScale());
   Log_InfoFmt("Multisampling: {}x{}", m_multisamples, m_per_sample_shading ? " (per sample shading)" : "");
   Log_InfoFmt("Dithering: {}{}", m_true_color ? "Disabled" : "Enabled",
-              (!m_true_color && m_scaled_dithering) ? " (Scaled)" : "");
+              (!m_true_color && m_scaled_dithering) ? " (Scaled)" : ((m_true_color && m_debanding) ? " (Debanding)" : ""));
   Log_InfoFmt("Texture Filtering: {}", Settings::GetTextureFilterDisplayName(m_texture_filtering));
   Log_InfoFmt("Dual-source blending: {}", m_supports_dual_source_blend ? "Supported" : "Not supported");
   Log_InfoFmt("Clamping UVs: {}", m_clamp_uvs ? "YES" : "NO");
@@ -698,7 +700,7 @@ bool GPU_HW::CompilePipelines()
   const GPUDevice::Features features = g_gpu_device->GetFeatures();
   GPU_HW_ShaderGen shadergen(g_gpu_device->GetRenderAPI(), m_resolution_scale, m_multisamples, m_per_sample_shading,
                              m_true_color, m_scaled_dithering, m_texture_filtering, m_clamp_uvs, m_pgxp_depth_buffer,
-                             m_disable_color_perspective, m_supports_dual_source_blend, m_supports_framebuffer_fetch);
+                             m_disable_color_perspective, m_supports_dual_source_blend, m_supports_framebuffer_fetch, m_debanding);
 
   ShaderCompileProgressTracker progress("Compiling Pipelines", 2 + (4 * 5 * 9 * 2 * 2) + (3 * 4 * 5 * 9 * 2 * 2) + 1 +
                                                                  2 + (2 * 2) + 2 + 1 + 1 + (2 * 3) + 1);
@@ -3126,6 +3128,11 @@ void GPU_HW::DrawRendererStats(bool is_idle_frame)
     ImGui::TextColored(m_true_color ? active_color : inactive_color, m_true_color ? "Enabled" : "Disabled");
     ImGui::NextColumn();
 
+    ImGui::TextUnformatted("Debanding:");
+    ImGui::NextColumn();
+    ImGui::TextColored(m_debanding ? active_color : inactive_color, m_debanding ? "Enabled" : "Disabled");
+    ImGui::NextColumn();
+
     ImGui::TextUnformatted("Scaled Dithering:");
     ImGui::NextColumn();
     ImGui::TextColored(m_scaled_dithering ? active_color : inactive_color, m_scaled_dithering ? "Enabled" : "Disabled");
diff --git a/src/core/gpu_hw.h b/src/core/gpu_hw.h
index 2ffc31f2e..a3a27d3cd 100644
--- a/src/core/gpu_hw.h
+++ b/src/core/gpu_hw.h
@@ -252,6 +252,7 @@ private:
   GPUDownsampleMode m_downsample_mode = GPUDownsampleMode::Disabled;
   GPUWireframeMode m_wireframe_mode = GPUWireframeMode::Disabled;
   bool m_true_color = true;
+  bool m_debanding = false;
   bool m_clamp_uvs = false;
   bool m_compute_uv_range = false;
   bool m_pgxp_depth_buffer = false;
diff --git a/src/core/gpu_hw_shadergen.cpp b/src/core/gpu_hw_shadergen.cpp
index e9c8e4cf0..398592ed7 100644
--- a/src/core/gpu_hw_shadergen.cpp
+++ b/src/core/gpu_hw_shadergen.cpp
@@ -9,11 +9,11 @@ GPU_HW_ShaderGen::GPU_HW_ShaderGen(RenderAPI render_api, u32 resolution_scale, u
                                    bool per_sample_shading, bool true_color, bool scaled_dithering,
                                    GPUTextureFilter texture_filtering, bool uv_limits, bool pgxp_depth,
                                    bool disable_color_perspective, bool supports_dual_source_blend,
-                                   bool supports_framebuffer_fetch)
+                                   bool supports_framebuffer_fetch, bool debanding)
   : ShaderGen(render_api, supports_dual_source_blend, supports_framebuffer_fetch), m_resolution_scale(resolution_scale),
     m_multisamples(multisamples), m_per_sample_shading(per_sample_shading), m_true_color(true_color),
     m_scaled_dithering(scaled_dithering), m_texture_filter(texture_filtering), m_uv_limits(uv_limits),
-    m_pgxp_depth(pgxp_depth), m_disable_color_perspective(disable_color_perspective)
+    m_pgxp_depth(pgxp_depth), m_disable_color_perspective(disable_color_perspective), m_debanding(debanding)
 {
 }
 
@@ -615,7 +615,7 @@ void FilteredSampleFromVRAM(uint4 texpage, float2 coords, float4 uv_limits,
 
   ialpha = res.w;
   texcol = float4(res.xyz, resW);
-     
+
   // Compensate for partially transparent sampling.
   if (ialpha > 0.0)
     texcol.rgb /= float3(ialpha, ialpha, ialpha);
@@ -662,6 +662,8 @@ std::string GPU_HW_ShaderGen::GenerateBatchFragmentShader(GPU_HW::BatchRenderMod
   DefineMacro(ss, "RAW_TEXTURE", raw_texture);
   DefineMacro(ss, "DITHERING", dithering);
   DefineMacro(ss, "DITHERING_SCALED", m_scaled_dithering);
+  // Debanding requires true color to work correctly.
+  DefineMacro(ss, "DEBANDING", m_true_color && m_debanding);
   DefineMacro(ss, "INTERLACING", interlacing);
   DefineMacro(ss, "TRUE_COLOR", m_true_color);
   DefineMacro(ss, "TEXTURE_FILTERING", m_texture_filter != GPUTextureFilter::Nearest);
@@ -761,13 +763,29 @@ float4 SampleFromVRAM(uint4 texpage, float2 coords)
     return SAMPLE_TEXTURE(samp0, float2(palette_icoord) * RCP_VRAM_SIZE);
   #else
     // Direct texturing. Render-to-texture effects. Use upscaled coordinates.
-    uint2 icoord = ApplyUpscaledTextureWindow(FloatToIntegerCoords(coords));    
+    uint2 icoord = ApplyUpscaledTextureWindow(FloatToIntegerCoords(coords));
     uint2 direct_icoord = texpage.xy + icoord;
     return SAMPLE_TEXTURE(samp0, float2(direct_icoord) * RCP_VRAM_SIZE);
   #endif
 }
 
 #endif
+
+// From https://alex.vlachos.com/graphics/Alex_Vlachos_Advanced_VR_Rendering_GDC2015.pdf
+// and https://www.shadertoy.com/view/MslGR8 (5th one starting from the bottom)
+// NOTE: `frag_coord` is in pixels (i.e. not normalized UV).
+float3 ApplyDebanding(float2 frag_coord) {
+#if DEBANDING
+	// Iestyn's RGB dither (7 asm instructions) from Portal 2 X360, slightly modified for VR.
+	float3 dither = float3(dot(vec2(171.0, 231.0), frag_coord));
+	dither.rgb = fract(dither.rgb / float3(103.0, 71.0, 97.0));
+
+	// Subtract 0.5 to avoid slightly brightening the whole viewport.
+	return (dither.rgb - 0.5) / 255.0;
+#else
+  return float3(0.0);
+#endif
+}
 )";
 
   if (textured)
@@ -797,7 +815,7 @@ float4 SampleFromVRAM(uint4 texpage, float2 coords)
 
   ss << R"(
 {
-  uint3 vertcol = uint3(v_col0.rgb * float3(255.0, 255.0, 255.0));
+  uint3 vertcol = uint3(v_col0.rgb * float3(255.0, 255.0, 255.0) + ApplyDebanding(v_pos.xy));
 
   bool semitransparent;
   uint3 icolor;
@@ -821,7 +839,7 @@ float4 SampleFromVRAM(uint4 texpage, float2 coords)
     #if UV_LIMITS
       float4 uv_limits = v_uv_limits;
       #if !PALETTE
-        // Extend the UV range to all "upscaled" pixels. This means 1-pixel-high polygon-based 
+        // Extend the UV range to all "upscaled" pixels. This means 1-pixel-high polygon-based
         // framebuffer effects won't be downsampled. (e.g. Mega Man Legends 2 haze effect)
         uv_limits *= float(RESOLUTION_SCALE);
         uv_limits.zw += float(RESOLUTION_SCALE - 1u);
@@ -859,7 +877,7 @@ float4 SampleFromVRAM(uint4 texpage, float2 coords)
         #endif
       #endif
     #else
-      icolor = uint3(texcol.rgb * float3(255.0, 255.0, 255.0));
+      icolor = uint3(texcol.rgb * float3(255.0, 255.0, 255.0) + ApplyDebanding(v_pos.xy));
       #if !RAW_TEXTURE
         icolor = (icolor * vertcol) >> 7;
         #if DITHERING
@@ -1051,10 +1069,10 @@ float3 SampleVRAM24(uint2 icoords)
   uint2 vram_coords = u_vram_offset + uint2((icoords.x * 3u) / 2u, icoords.y);
   uint s0 = RGBA8ToRGBA5551(LoadVRAM(int2((vram_coords % clamp_size) * RESOLUTION_SCALE)));
   uint s1 = RGBA8ToRGBA5551(LoadVRAM(int2(((vram_coords + uint2(1, 0)) % clamp_size) * RESOLUTION_SCALE)));
-    
+
   // select which part of the combined 16-bit texels we are currently shading
   uint s1s0 = ((s1 << 16) | s0) >> ((icoords.x & 1u) * 8u);
-    
+
   // extract components and normalize
   return float3(float(s1s0 & 0xFFu) / 255.0, float((s1s0 >> 8u) & 0xFFu) / 255.0,
                 float((s1s0 >> 16u) & 0xFFu) / 255.0);
@@ -1113,7 +1131,7 @@ float3 SampleVRAM24Smoothed(uint2 icoords)
       o_col0 = float4(SampleVRAM24Smoothed(icoords), 1.0);
     #else
       o_col0 = float4(SampleVRAM24(icoords), 1.0);
-    #endif    
+    #endif
   #else
     o_col0 = float4(LoadVRAM(int2((icoords + u_vram_offset) % VRAM_SIZE)).rgb, 1.0);
   #endif
@@ -1333,7 +1351,7 @@ std::string GPU_HW_ShaderGen::GenerateVRAMWriteFragmentShader(bool use_buffer, b
   uint buffer_offset = u_buffer_base_offset + (offset.y * u_size.x) + offset.x;
   uint value = GET_VALUE(buffer_offset) | u_mask_or_bits;
 #endif
-  
+
   o_col0 = RGBA5551ToRGBA8(value);
 #if !PGXP_DEPTH
   o_depth = (o_col0.a == 1.0) ? u_depth_value : 0.0;
diff --git a/src/core/gpu_hw_shadergen.h b/src/core/gpu_hw_shadergen.h
index 576550c72..938e6e142 100644
--- a/src/core/gpu_hw_shadergen.h
+++ b/src/core/gpu_hw_shadergen.h
@@ -11,7 +11,7 @@ public:
   GPU_HW_ShaderGen(RenderAPI render_api, u32 resolution_scale, u32 multisamples, bool per_sample_shading,
                    bool true_color, bool scaled_dithering, GPUTextureFilter texture_filtering, bool uv_limits,
                    bool pgxp_depth, bool disable_color_perspective, bool supports_dual_source_blend,
-                   bool supports_framebuffer_fetch);
+                   bool supports_framebuffer_fetch, bool debanding);
   ~GPU_HW_ShaderGen();
 
   std::string GenerateBatchVertexShader(bool textured);
@@ -51,4 +51,5 @@ private:
   bool m_uv_limits;
   bool m_pgxp_depth;
   bool m_disable_color_perspective;
+  bool m_debanding;
 };
diff --git a/src/core/imgui_overlays.cpp b/src/core/imgui_overlays.cpp
index 15dd71717..e2f931b37 100644
--- a/src/core/imgui_overlays.cpp
+++ b/src/core/imgui_overlays.cpp
@@ -525,8 +525,13 @@ void ImGuiManager::DrawEnhancementsOverlay()
   {
     text.append_format(" {}x{}", g_settings.gpu_multisamples, g_settings.gpu_per_sample_shading ? "SSAA" : "MSAA");
   }
-  if (g_settings.gpu_true_color)
-    text.append(" TrueCol");
+  if (g_settings.gpu_true_color) {
+    if (g_settings.gpu_debanding) {
+      text.append(" TrueColDeband");
+    } else {
+      text.append(" TrueCol");
+    }
+  }
   if (g_settings.gpu_disable_interlacing)
     text.append(" ForceProg");
   if (g_settings.gpu_force_ntsc_timings && System::GetRegion() == ConsoleRegion::PAL)
diff --git a/src/core/settings.cpp b/src/core/settings.cpp
index bbcfa7155..18a6c4db5 100644
--- a/src/core/settings.cpp
+++ b/src/core/settings.cpp
@@ -190,6 +190,7 @@ void Settings::Load(SettingsInterface& si)
   gpu_use_software_renderer_for_readbacks = si.GetBoolValue("GPU", "UseSoftwareRendererForReadbacks", false);
   gpu_threaded_presentation = si.GetBoolValue("GPU", "ThreadedPresentation", true);
   gpu_true_color = si.GetBoolValue("GPU", "TrueColor", true);
+  gpu_debanding = si.GetBoolValue("GPU", "Debanding", false);
   gpu_scaled_dithering = si.GetBoolValue("GPU", "ScaledDithering", true);
   gpu_texture_filter =
     ParseTextureFilterName(
@@ -456,6 +457,7 @@ void Settings::Save(SettingsInterface& si) const
   si.SetBoolValue("GPU", "ThreadedPresentation", gpu_threaded_presentation);
   si.SetBoolValue("GPU", "UseSoftwareRendererForReadbacks", gpu_use_software_renderer_for_readbacks);
   si.SetBoolValue("GPU", "TrueColor", gpu_true_color);
+  si.SetBoolValue("GPU", "Debanding", gpu_debanding);
   si.SetBoolValue("GPU", "ScaledDithering", gpu_scaled_dithering);
   si.SetStringValue("GPU", "TextureFilter", GetTextureFilterName(gpu_texture_filter));
   si.SetStringValue("GPU", "DownsampleMode", GetDownsampleModeName(gpu_downsample_mode));
@@ -614,6 +616,7 @@ void Settings::FixIncompatibleSettings(bool display_osd_messages)
     g_settings.gpu_multisamples = 1;
     g_settings.gpu_per_sample_shading = false;
     g_settings.gpu_true_color = false;
+    g_settings.gpu_debanding = false;
     g_settings.gpu_scaled_dithering = false;
     g_settings.gpu_texture_filter = GPUTextureFilter::Nearest;
     g_settings.gpu_disable_interlacing = false;
diff --git a/src/core/settings.h b/src/core/settings.h
index aa4445219..7924a0ce6 100644
--- a/src/core/settings.h
+++ b/src/core/settings.h
@@ -111,6 +111,7 @@ struct Settings
   bool gpu_disable_texture_copy_to_self = false;
   bool gpu_per_sample_shading = false;
   bool gpu_true_color = true;
+  bool gpu_debanding = false;
   bool gpu_scaled_dithering = true;
   GPUTextureFilter gpu_texture_filter = DEFAULT_GPU_TEXTURE_FILTER;
   GPUDownsampleMode gpu_downsample_mode = DEFAULT_GPU_DOWNSAMPLE_MODE;
diff --git a/src/core/system.cpp b/src/core/system.cpp
index 8e4166aff..044566e09 100644
--- a/src/core/system.cpp
+++ b/src/core/system.cpp
@@ -3626,6 +3626,7 @@ void System::CheckForSettingsChanges(const Settings& old_settings)
         g_settings.gpu_fifo_size != old_settings.gpu_fifo_size ||
         g_settings.gpu_max_run_ahead != old_settings.gpu_max_run_ahead ||
         g_settings.gpu_true_color != old_settings.gpu_true_color ||
+        g_settings.gpu_debanding != old_settings.gpu_debanding ||
         g_settings.gpu_scaled_dithering != old_settings.gpu_scaled_dithering ||
         g_settings.gpu_texture_filter != old_settings.gpu_texture_filter ||
         g_settings.gpu_disable_interlacing != old_settings.gpu_disable_interlacing ||
diff --git a/src/duckstation-qt/enhancementsettingswidget.cpp b/src/duckstation-qt/enhancementsettingswidget.cpp
index ce25bf4e6..0053037bf 100644
--- a/src/duckstation-qt/enhancementsettingswidget.cpp
+++ b/src/duckstation-qt/enhancementsettingswidget.cpp
@@ -80,6 +80,11 @@ EnhancementSettingsWidget::EnhancementSettingsWidget(SettingsWindow* dialog, QWi
        "Disabling the option also enables dithering, which makes the transition between colours less sharp by applying "
        "a pattern around those pixels. Most games are compatible with this option, but there is a number which aren't "
        "and will have broken effects with it enabled. Only applies to the hardware renderers."));
+  dialog->registerWidgetHelp(
+    m_ui.debanding, tr("True Color Debanding"), tr("Unchecked"),
+    tr("Applies modern dithering techniques to further smooth out gradients when true color is enabled. "
+      "This debanding is performed during rendering (as opposed to a post-processing step), which allows it to be fast while preserving detail. "
+      "Debanding increases the file size of screenshots due to the subtle dithering pattern present in screenshots."));
   dialog->registerWidgetHelp(
     m_ui.scaledDithering, tr("Scaled Dithering (scale dither pattern to resolution)"), tr("Checked"),
     tr("Scales the dither pattern to the resolution scale of the emulated GPU. This makes the dither pattern much less "
diff --git a/src/duckstation-qt/enhancementsettingswidget.ui b/src/duckstation-qt/enhancementsettingswidget.ui
index d4e873427..8a4cc52a8 100644
--- a/src/duckstation-qt/enhancementsettingswidget.ui
+++ b/src/duckstation-qt/enhancementsettingswidget.ui
@@ -49,13 +49,20 @@
       <item row="2" column="1">
        <widget class="QComboBox" name="textureFiltering"/>
       </item>
-      <item row="4" column="0" colspan="2">
+      <item row="4" column="0">
        <widget class="QCheckBox" name="trueColor">
         <property name="text">
          <string>True Color Rendering (24-bit, disables dithering)</string>
         </property>
        </widget>
       </item>
+      <item row="4" column="1">
+       <widget class="QCheckBox" name="debanding">
+        <property name="text">
+         <string>True Color Debanding</string>
+        </property>
+       </widget>
+      </item>
       <item row="5" column="0" colspan="2">
        <widget class="QCheckBox" name="scaledDithering">
         <property name="text">