We investigated whether infants from 8-22 weeks of age were sensitive to the illusory contour created by aligned line terminators. Previous reports of illusory-contour detection in infants under 4 months old could be due to infants' preference for the presence of terminators rather than their configuration. We generated preferential-looking stimuli containing sinusoidal lines whose oscillating, abutting terminators give a strong illusory contour in adult perception. Our experiments demonstrated a preference in infants 8 weeks old and above for an oscillating illusory contour compared with a stimulus containing equal terminator density and movement. Control experiments excluded local line density, or attention to alignment in general, as the basis for this result. In the youngest age group (8-10 weeks) stimulus velocity appears to be critical in determining the visibility of illusory contours, which is consistent with other data on motion processing at this age. We conclude that, by 2 months of age, the infant's visual system contains the nonlinear mechanisms necessary to extract an illusory contour from aligned terminators.