We evaluated the hypothesis that smooth pursuit eye movements affect speed discrimination thresholds of distal stimuli because they alter the retinal image speed, Subjects judged speed differences of sine-wave gratings while they simultaneously pursued a superimposed moving bar, Speed discrimination thresholds were measured, under conditions of controlled eye movements, for grating speeds of 0.5 and 2.0 deg/sec across a range of eye velocities, Thresholds were simulated using a Monte Carlo method based on the retinal speed hypothesis, and the simulation predictions were compared to the psychophysically determined thresholds, The simulation results provided a good match to the psychophysical data for conditions where the eye moved at a slower speed than the grating, regardless of whether the eye moved in the same or opposite direction, However, when the eye moved at a faster speed than the grating in the same direction, the psychophysical thresholds were significantly higher than predicted by the simulation, Control experiments and analyses rule out explanations based on relative motion cues, saccadic involvement, and attentional demands, Copyright (C) 1996 Elsevier Science Ltd.