We used fMRI to study figure–ground representation and its decay in primary visual cortex (V1). Human observers viewed a motion-defined figure that gradually became camouflaged by a cluttered background after it stopped moving. V1 showed positive fMRI responses corresponding to the moving figure and negative fMRI responses corresponding to the static background. This positive–negative delineation of V1 “figure” and “background” fMRI responses defined a retinotopically organized figure–ground representation that persisted after the figure stopped moving but eventually decayed. The temporal dynamics of V1 “figure” and “background” fMRI responses differed substantially. Positive “figure” responses continued to increase for several seconds after the figure stopped moving and remained elevated after the figure had disappeared. We propose that the sustained positive V1 “figure” fMRI responses reflected both persistent figure–ground representation and sustained attention to the location of the figure after its disappearance, as did subjects' reports of persistence. The decreasing “background” fMRI responses were relatively shorter-lived and less biased by spatial attention. Our results show that the transition from a vivid figure–ground percept to its disappearance corresponds to the concurrent decay of figure enhancement and background suppression in V1, both of which play a role in form-based perceptual memory.