Motion-induced blindness (MIB) is a visual phenomenon in which highly salient visual targets spontaneously disappear from visual awareness (and subsequently reappear) when superimposed on a moving background of distracters. Such fluctuations in awareness of the targets, although they remain physically present, provide an ideal paradigm to study the neural correlates of visual awareness. Existing behavioral data on MIB are consistent both with a role for structures early in visual processing and with involvement of high-level visual processes. To further investigate this issue, we used high field functional MRI to investigate signals in human low-level visual cortex and motion-sensitive area V5/MT while participants reported disappearance and reappearance of an MIB target. Surprisingly, perceptual invisibility of the target was coupled to an increase in activity in low-level visual cortex plus area V5/MT compared with when the target was visible. This increase was largest in retinotopic regions representing the target location. One possibility is that our findings result from an active process of completion of the field of distracters that acts locally in the visual cortex, coupled to a more global process that facilitates invisibility in general visual cortex. Our findings show that the earliest anatomical stages of human visual cortical processing are implicated in MIB, as with other forms of bistable perception.