In humans, the perceived speed of random dot patterns (RDP) moving within small apertures is faster than that of RDPs moving within larger apertures at the same physical speed. To investigate the neural basis of this illusion, we recorded the responses of direction- and speed-selective neurons in the middle temporal area (MT) of macaque monkeys to stimuli varying in size and speed. Our results show that the preferred speed of MT neurons is slower for smaller stimuli. This effect was larger for neurons preferring faster speeds, matching our psychophysical observation in human subjects that the magnitude of the misperception is larger at higher stimulus speeds. Our physiological data indicate that, across a population of speed-tuned neurons in MT, decreasing the size of a stimulus would shift the activity profile to neurons tuned for higher speeds. Modeling a labeled-line readout of this shifted profile, we show an increased apparent speed, in line with the psychophysical observations. This link strengthens the evidence for a causal role of area MT in speed perception. The systematic shift in tuning curves of single neurons with stimulus size might reflect a general mechanism for feature-mismatch illusions in visual perception.