A series of psychophysical and electrophysiological experiments is reported using the apparent motion (AM) breakdown effect. Breakdown describes an effect in AM in which, during continuous viewing, the percept of smooth of a single stimulus alternates with the percept of two discrete alternating stimuli. Visual evoked potentials (VEPs) were recorded during periods of motion or breakdown ("nonmotion") in horizontal and vertical displays. VEPs were compared with synthetic VEPs ("composite-flash") produced by adding VEPs to each element of the display recorded in isolation. Subtraction of VEPs was used in an attempt to compare the electrical responses with the processing of information relating to the form of the stimulus, subthreshold motion processing, and suprathreshold motion processing. The results, presented as scalp electrical potential distribution maps, were interpreted as consistent with a central adaptation process underlying the breakdown effect. The results also indicated that the hemispheric asymmetries in AM VEPs described by Manning, Finlay, and Fenelon (1988) were most likely due to the position of the stimuli in the visual field, rather than as a lateralization of motion processes per se. The results also provided evidence that the subthreshold and suprathreshold motion responses to the display were the product of different populations of motion units.