Prolonged exposure to a stimulus, called 'adaptation', reduces cortical responsiveness. Adaptation has been studied extensively in primary visual cortex (V1), where responsivity is usually reduced most when the adapting and test stimuli are well matched. Theories about the functional benefits of adaptation have relied on this specificity, but the resultant changes in neuronal tuning are of the wrong type to account for well-documented perceptual aftereffects. Here we have used moving sinusoidal gratings to study the effect of adaptation on the direction tuning of neurons in area MT in macaques. Responsivity in MT is maintained best in the adapted direction and is strongly reduced for nearby directions. Consequently, adaptation in the preferred direction reduces the direction-tuning bandwidth, whereas adaptation at near-preferred directions causes tuning to shift toward the adapted direction. This previously unknown effect of adaptation is consistent with perceptual aftereffects and indicates that different cortical regions may adjust to constant sensory input in distinct ways.