Most people see movement in Figure 1, although the image is static. Motion is seen from black --> blue --> white --> yellow --> black. Many hypotheses for the illusory motion have been proposed, although none have been tested physiologically. We found that the illusion works well even if it is achromatic: yellow is replaced with light gray, and blue is replaced with dark gray. We show that the critical feature for inducing illusory motion is the luminance relationship of the static elements. Illusory motion is seen from black --> dark gray --> white --> light gray --> black. In psychophysical experiments, we found that all four pairs of adjacent elements when presented alone each produced illusory motion consistent with the original illusion, a result not expected from any current models. We also show that direction-selective neurons in macaque visual cortex gave directional responses to the same static element pairs, also in a direction consistent with the illusory motion. This is the first demonstration of directional responses by single neurons to static displays and supports a model in which low-level, first-order motion detectors interpret contrast-dependent differences in response timing as motion. We demonstrate that this illusion is a static version of four-stroke apparent motion.