Studying the mismatch between perception and reality helps us better understand the constructive nature of the visual brain. The Pinna-Brelstaff motion illusion is a compelling example illustrating how a complex moving pattern can generate an illusory motion perception. When an observer moves toward (expansion) or away (contraction) from the Pinna-Brelstaff figure, the figure appears to rotate. The neural mechanisms underlying the illusory complex-flow motion of rotation, expansion, and contraction remain unknown. We studied this question at both perceptual and neuronal levels in behaving male macaques by using carefully parametrized Pinna-Brelstaff figures that induce the above motion illusions. We first demonstrate that macaques perceive illusory motion in a manner similar to that of human observers. Neurophysiological recordings were subsequently performed in the middle temporal area (MT) and the dorsal portion of the medial superior temporal area (MSTd). We find that subgroups of MSTd neurons encoding a particular global pattern of real complex-flow motion (rotation, expansion, contraction) also represent illusory motion patterns of the same class. They require an extra 15 ms to reliably discriminate the illusion. In contrast, MT neurons encode both real and illusory local motions with similar temporal delays. These findings reveal that illusory complex-flow motion is first represented in MSTd by the same neurons that normally encode real complex-flow motion. However, the extraction of global illusory motion in MSTd from other classes of real complex-flow motion requires extra processing time. Our study illustrates a cascaded integration mechanism from MT to MSTd underlying the transformation from external physical to internal nonveridical flow-motion perception.