Prematurity is associated with a number of impairments in visual function. This study evaluated the impact of premature birth on the development of visual motion processing in a group of very-low-birthweight (<1500 gm), 5-8 year old children (n = 19). Premature children's sensitivity to local and global motion was compared to that of control children (n = 19) born at term. Sensitivity to local motion was assessed by measuring thresholds for detecting luminance-defined (first-order) or contrast-defined (second-order) stimuli. Sensitivity to global motion was assessed by measuring coherence thresholds for random dot kinematograms. For local motion, prematurity was associated with reduced sensitivity to first-order and second-order stimuli (1.02 and 1.48 times the thresholds of controls, respectively). Sensitivity to global motion was also impaired in premature children, with coherence thresholds being 3 times higher than in the control sample. Difficulties in perceiving both types of local motion stimuli were not related to impaired stereoacuity. The presence of mild retinopathy of prematurity (stage 1 or 2) and/or intraventricular hemorrhage (grade 1 or 2), however, increased the risk of both local and global motion-processing problems. Together, these findings suggest that premature children show deficits on all aspects of motion vision tested, with the level of impairment increasing with increasing computational complexity.These findings serve to increase our understanding of the impact of premature birth on the development of motion-processing subsystems in humans.