It is demonstrated that there exist two frequencies which are critical in the perception of moving spatially-periodic stimuli, viz., a lower critical frequency which marks the transition of sensation from directed motion to non-directed motion or flicker, and an upper critical frequency which marks the transition of sensation from the latter category to fusion. Using a rotating annular stimulus, and working at motion and fusion thresholds, the dependence of these critical temporal frequencies upon the angular area, the spatial period, and the waveform of the stimulus were investigated. The most significant results to emerge are the spatial phase insensitivity of the upper critical frequency as a function of angular area, and the onset of a 'stationary stroboscopic' effect for angular areas greater that half the spatial period of the stimulus. These and other findings are subjected to a detailed analysis, and a mathematical model of the system constructed. The main elements of the model are shown to be 'vertical' processing units, which are identified with de Lange filters, and 'horizontal' processing units, which are identified with Reichardt multipliers. An expression for the general motion response of the system model is obtained, and this is then reduced to a threshold statement. With further analysis, the theoretical sine-wave motion response is fitted to the experimental data, but it is necessary to modify the Reichardt multiplier with the introduction of a low pass filter into the output, in order to describe the observed square-wave motion response. It is shown that the model predicts a motion response which is sensitive to the phase structure of the stimulus pattern at low temporal frequencies, and phase insensitive at high temporal frequencies. This prediction was tested experimentally, and found to be true.