Once you go past 100% (or 125% with the "XP-style DPI scaling" checkbox ticked), Windows by default takes over the scaling of your UI. It does so by having your app render its output to a bitmap and drawing that bitmap to the screen. The rescaling of that bitmap makes the text inevitably look fuzzy. A feature called "DPI virtualization", it keeps old programs usable on high resolution monitors.

You have to explicitly let it know that you can handle higher DPI settings by adding the <dpiAware> element to your manifest. The MSDN page is here but it isn't complete since it is omitting the UAC settings. Project + Add New Item, pick "Application Manifest File". Edit the manifest text or copy/paste this:

<?xml version="1.0" encoding="utf-8"?>
<assembly xmlns="urn:schemas-microsoft-com:asm.v1" manifestVersion="1.0" xmlns:asmv3="urn:schemas-microsoft-com:asm.v3" >
    <assemblyIdentity version="" name="MyApplication.app"/>
    <trustInfo xmlns="urn:schemas-microsoft-com:asm.v2">
            <requestedPrivileges xmlns="urn:schemas-microsoft-com:asm.v3">
                <requestedExecutionLevel level="asInvoker" uiAccess="false" />
        <asmv3:windowsSettings xmlns="http://schemas.microsoft.com/SMI/2005/WindowsSettings">

You can also pinvoke SetProcessDPIAware() in your Main() method, necessary for example if you deploy with ClickOnce:

    static void Main() {
        if (Environment.OSVersion.Version.Major >= 6) SetProcessDPIAware();
        Application.Run(new Form1());             // Edit as needed

    private static extern bool SetProcessDPIAware();

UPDATE, this common need is finally a bit easier if you use VS2015 Update 1 or higher. The added manifest already has the relevant directive, just remove the comments.

Keyword for search so I can find this post back: dpiAware