An electronic device may have a display such as a liquid crystal display. A color filter layer may be formed on a display layer such as a transparent substrate layer. The color filter layer may include an array of color filter elements on a central portion of a surface of the transparent substrate layer. The color filter layer may include a peripheral color filter of a single color that at least partially surrounds the color filter elements on the central portion of the inner surface. In an inactive portion of the display, an opaque masking material may be formed over the peripheral color filter. In an active portion of the display the opaque masking material may form a grid that covers interfaces between adjacent color filter elements. The peripheral color filter may completely cover the surface of the substrate in the entire inactive portion of the display.