How do spatially disjoint and ambiguous local motion signals in multiple directions generate coherent and unambiguous representations of object motion? Various motion percepts, starting with those of Duncker (Induced motion, 1929/1938) and Johansson (Configurations in event perception, 1950), obey a rule of vector decomposition, in which global motion appears to be subtracted from the true motion path of localized stimulus components, so that objects and their parts are seen as moving relative to a common reference frame. A neural model predicts how vector decomposition results from multiple-scale and multiple-depth interactions within and between the form- and motion-processing streams in V1–V2 and V1–MST, which include form grouping, form-to-motion capture, figure–ground separation, and object motion capture mechanisms. Particular advantages of the model are that these mechanisms solve the aperture problem, group spatially disjoint moving objects via illusory contours, capture object motion direction signals on real and illusory contours, and use interdepth directional inhibition to cause a vector decomposition, whereby the motion directions of a moving frame at a nearer depth suppress those directions at a farther depth, and thereby cause a peak shift in the perceived directions of object parts moving with respect to the frame.