In many species, including humans, exposure to high image velocities induces motion adaptation, but the neural mechanisms are unclear. We have isolated two mechanisms that act on directionally selective motion-sensitive neurons in the fly's visual system. Both are driven strongly by movement and weakly, if at all, by flicker. The first mechanism, a subtractive process, is directional and is only activated by stimuli that excite the neuron. The second, a reduction in contrast gain, is strongly recruited by motion in any direction, even if the adapting stimulus does not excite the cell. These mechanisms are well designed to operate effectively within the context of motion coding. They can prevent saturation at susceptible nonlinear stages in processing, cope with rapid changes in direction, and preserve fine structure within receptive fields.