The visual system uses the pattern of motion on the retina to analyze the motion of objects in the world, and the motion of the observer him/herself. Distinguishing between retinal motion evoked by movement of the retina in space and retinal motion evoked by movement of objects in the environment is computationally difficult, and the human visual system frequently misinterprets the meaning of retinal motion. In this study, we demonstrate that the visual system of the Rhesus monkey also misinterprets retinal motion. We show that monkeys erroneously report the trajectories of pursuit targets or their own pursuit eye movements during an epoch of smooth pursuit across an orthogonally moving background. Furthermore, when they make saccades to the spatial location of stimuli that flashed early in an epoch of smooth pursuit or fixation, they make large errors that appear to take into account the erroneous smooth eye movement that they report in the first experiment, and not the eye movement that they actually make.