Distinct mechanisms underlying the visual perception of luminance- (first-order) and contrast-defined (second-order) motion have been proposed from electrophysiological, human psychophysical and neurological studies; however a cortical specialization for these mechanisms has proven elusive. Here human brain imaging combined with psychophysical methods was used to assess cortical specializations for processing these two kinds of motion. A common stimulus construction was employed, controlling for differences in spatial and temporal properties, psychophysical performance and attention. Distinct cortical regions have been found preferentially processing either first- or second-order motion, both in occipital and parietal lobes, producing the first physiological evidence in humans to support evidence from psychophysical studies, brain lesion sites and computational models. These results provide evidence for the idea that first-order motion is computed in V1 and second-order motion in later occipital visual areas, and additionally suggest a functional dissociation between these two kinds of motion beyond the occipital lobe.