Although many adaptation-induced effects on neuronal response properties have been described, it is often unknown at what processing stages in the nervous system they are generated. We focused on fly visual motion-sensitive neurons to identify changes in response characteristics during prolonged visual motion stimulation. By simultaneous recordings of synaptically coupled neurons, we were able to directly compare adaptation-induced effects at two consecutive processing stages in the fly visual motion pathway. This allowed us to narrow the potential sites of adaptation effects within the visual system and to relate them to the properties of signal transfer between neurons. Motion adaptation was accompanied by a response reduction, which was somewhat stronger in postsynaptic than in presynaptic cells. We found that the linear representation of motion velocity degrades during adaptation to a white-noise velocity-modulated stimulus. This effect is caused by an increasingly nonlinear velocity representation rather than by an increase of noise and is similarly strong in presynaptic and postsynaptic neurons. In accordance with this similarity, the dynamics and the reliability of interneuronal signal transfer remained nearly constant. Thus, adaptation is mainly based on processes located in the presynaptic neuron or in more peripheral processing stages. In contrast, changes of transfer properties at the analyzed synapse or in postsynaptic spike generation contribute little to changes in velocity coding during motion adaptation.