This report describes studies of visual evoked potentials (VEP) in ten subjects produced in response to Kanizsa's square and a control stimulus which did not involve a visual illusion but which had a similar spatial organization. The results showed that the amplitude-time characteristics of VEP depended on the illusory outlines. Differences in the parameters of VEP produced using the two stimuli were seen in the occipital, parietal, and temporal areas. VEP amplitude differences between the peaks of the N180 and P230 waves increased and the latent period of the N300 wave decreased on presentation of the illusory outlines as compared with the control stimulus. Interstimulus differences in amplitude were seen in the left and right occipital and left temporal areas, while differences in latency were seen in the left occipital lead. The data supported the suggestion that the visual perception system includes two areas encoding illusory outlines, which are associated with different aspects of visual analysis--encoding of individual signs and their complexes (O1 and O2) and comparing sensory codes with codes stored in memory (T5).