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If a Gabor pattern drifts in one direction while its internal texture drifts in the orthogonal direction, its perceived direction deviates strongly from its true direction and is instead some combination of its real external motion and its internal motion (Tse & Hsieh, 2006). In the first experiment, we confirm that, for the stimuli used in our experiment, the direction shifts on a gray background were explained by a vector combination of the internal and external motions whereas for the Gabor on a black background, we find no illusory shifts. These results suggest that the internal motion contributes to the perceived direction but only when the Gabor’s positional uncertainty is high. Next, we test whether the vector combination is based on motions on the retina or motions in the world. When participants track a fixation point that moves in tandem with the Gabor, keeping it roughly stable on the retina, the illusion is undiminished. This finding indicates that the vector combination of internal and external motion that produces the double-drift illusion must happen after the eye movement signals have been factored into the stimulus motions to recover motions in the world, in particular, in areas V3A, V6, MSTd, and VIP.