We perceive motion when presented with spatiotemporal changes in contrast (second-order cue). This requires linear signals to be rectified and then summed in temporal order to compute direction. Although both operations have been attributed to cortex, rectification might occur in retina, prior to the ganglion cell. Here we show that the Y ganglion cell does indeed respond to spatiotemporal contrast modulations of a second-order motion stimulus. Responses in an OFF ganglion cell are caused by an EPSP/IPSP sequence evoked from within the dendritic field; in ON cells inhibition is indirect. Inhibitory effects, which are blocked by tetrodotoxin, clamp the response near resting potential thus preventing saturation. Apparently the computation for second-order motion can be initiated by Y cells and completed by cortical cells that sum outputs of multiple Y cells in a directionally selective manner.