Because environmental information is often suboptimal, visual perception must frequently rely on the brain's reconstruction of contours absent from retinal images. Illusory contour (IC) stimuli have been used to investigate these "filling-in" processes. Intracranial recordings and neuroimaging studies show IC sensitivity in lower-tier area V2, and to a lesser extent V1. Some interpret these data as evidence for feedforward processing of IC stimuli, beginning at lower-tier visual areas. On the basis of lesion, visual evoked potentials (VEP), and neuroimaging evidence, others contend that IC sensitivity is a later, higher-order process. Whether IC sensitivity seen in lower-tier areas indexes feedforward or feedback processing remains unresolved. In a series of experiments, we addressed the spatiotemporal dynamics of IC processing. Centrally presented IC stimuli resulted in early VEP modulation (88-100 msec) over lateral-occipital (LOC) scalp--the IC effect. The IC effect followed visual response onset by 40 msec. Scalp current density topographic mapping, source analysis, and functional magnetic resonance imaging results all localized the IC effect to bilateral LOC areas. We propose that IC sensitivity described in V2 and V1 may reflect predominantly feedback modulation from higher-tier LOC areas, where IC sensitivity first occurs. Two additional observations further support this proposal. The latency of the IC effect shifted dramatically later (approximately 120 msec) when stimuli were laterally presented, indicating that retinotopic position alters IC processing. Immediately preceding the IC effect, the VEP modulated with inducer eccentricity--the configuration effect. We interpret this to represent contributions from global stimulus parameters to scene analysis. In contrast to the IC effect, the topography of the configuration effect was restricted to central parieto-occipital scalp.