Visual systems detect many features of natural scenes, including motion. Motion detection guides critical behaviors like hunting, evading predators, and finding mates. It can be framed as an inference problem, in which light intensity measurements are combined to estimate a latent variable of image velocity. Interestingly, several patterns of light intensity over space and time can elicit strong illusory motion percepts in humans and in other distantly related animals, like flies. I will present our lab's recent work on understanding how motion illusions are generated in the small brain of the fruit fly Drosophila, where genetic tools allow us to dissect the roles of individual neurons in circuit computations. We have used these tools to understand the neural origins of two visual illusions that are shared by flies and humans. The mechanisms we uncovered tell us about organizing principles of visual processing in the fly.