A head-mounted device may include a display that generates content and an optical system through which the content is viewable. The head-mounted device may include a lighting system that illuminates a periphery of the optical system. When the user places the device on his or her head in a brightly lit environment, control circuitry may operate the lighting system to provide bright illumination to the user's peripheral vision. The lighting system may gradually decrease in brightness until the user transitions from a bright-adapted state to a dark-adapted state. When the user is partially or fully dark-adapted, the lighting system may be turned off and the display may be turned on. In some arrangements, an ambient light sensor may measure ambient light conditions outside of the electronic device and the control circuitry may control the lighting system based on the ambient lighting conditions.