When a gray figure is surrounded by a background of dynamic texture, fixating away from the figure for several seconds will result in an illusory replacement of the figure by its background. This visual illusion is referred to as perceptual filling-in. The study of filling-in is important, because the underlying neural processes compensate for imperfections in our visual system (e.g., the blind spot) and contribute to normal surface perception. A long-standing question has been whether perceptual filling-in results from symbolic tagging of surface regions in higher order cortex (ignoring the absence of information), or from active neural interpolation in lower order visual areas (active filling-in of information). The present chapter reviews a number of psychophysical studies in human subjects and physiological experiments in monkeys to evaluate the above two hypotheses. The data combined show that there is strong evidence for neural interpolation processes in retinotopically organized, lower order areas, but that there is also a role for higher order perceptual and cognitive factors such as attention.