Previous experimental studies of figural after-effect phenomena are discussed. Particular reference is made to the general question of establishing the locations of perceptual mechanisms, to the possibility of the same mechanism being responsible for both after-effects and illusions and to difficulties arising when attempting to evaluate research in this field. The “distorting” and “distorted” components of Ponzo's illusion are distinguished and prepared as I- and T-figures. An apparatus is described employing which any after-effect due to the former can be determined accurately by adjustments made in the latter. Figural after-effects are measured following several periods of pre-exposure of the I-figure and allowing various timeintervals to elapse before the T-pattern is displayed. The extent of illusion is estimated also when both components are seen together. No significant differences obtain between monocular and binocular presentation. Accordingly, these data are merged and arranged along a single time continuum. This suggests strongly that the same mechanism underlies both forms of perceptual distortion. In a further experiment the I- and T-components are presented successively to alternate eyes. Extents of interocular transfer prove insignificant in comparison with monocular and binocular conditions. A schematic analysis of projections of I- and T-figures, however, reveals that they are represented topographically upon the cortex in essentially similar ways. It is concluded, therefore, that the mechanism concerned is located in sub-cortical regions, probably within the retina itself.