We examined the ability of observers to determine the vertical alignment of three Gabor patches (cosine gratings tapered in X and Y by Gaussians) when the grating within the middle patch was moving right or left. The comparison patches were flickered in counterphase, as was the test patch in a control condition. In all conditions, the Gabor patch itself (the envelope) was stationary. Vernier acuity (i.e. sensitivity) was almost as good with the moving as with the flickering Gabors, but there was a very pronounced positional bias in the case of the patterns in which the internal gratings were moving. The (stationary) patches appeared to be displaced in the direction of the grating movement. Thus if the grating were drifting rightwards, the observer would see the patches as being aligned only when the test patch position in fact was shifted far over to the left. This movement-related bias increased rapidly with retinal eccentricity, reaching 15 min at 8 deg eccentricity. The bias was greatest at 4-8 Hz temporal frequency, and at low spatial frequencies. Whether the patterns were on the horizontal or the vertical meridian was largely irrelevant, but larger biases were found with patterns moving towards or away from the fovea than with those moving in a tangential direction.