Visually guided action relies on accurate perception of egocentric direction. Unfortunately, perceived direction easily becomes misaligned. How is this problem overcome? One theory (R. Held & S. J. Freedman, 1963) is that during self-movement the observer uses the relationship between anticipated and experienced sensory feedback as a source of information to maintain alignment. However, data supporting this theory is equivocal, and recent evidence appears contradictory. We reexamined the issue. We injected an error into perceived visual direction and then assessed realignment after a period of walking toward a target. We manipulated the sensory information available (presence of retinal motion, Experiment 1; presence of peripheral motion, Experiment 2) and found that as the amount of retinal motion was reduced (Experiments 1 and 2), realignment of perceived visual direction decreased. When we then (Experiment 3) removed the discrepancy between anticipated and experienced retinal motion, no realignment was observed. Our results provide evidence that a discrepancy between anticipated and experienced sensory feedback is an important source of information for the alignment of egocentric space, with retinal motion having a particular role in driving a realignment of perceived visual direction.