Using a multi-channel SQUID-based neuromagnetometer, we have determined the location, temporal dynamics and functional response properties of the human homologue of the primate cortical area V5 (MT). We provide evidence that area V5 in humans is located near the occipito-temporal border in a minor sulcus immediately below the superior temporal sulcus. this area is selective for low spatial frequencies ( < or = 4.0 c/deg), responds to a wide range of temporal frequencies ( < or = 35 Hz) and shows response saturation for stimulus contrasts greater than 10%. In addition, we find that this area is not responsive to purely chromatic patterns but is responsive to motion-contrast stimuli. Our results are consistent with the hypothesis that area V5 in humans represents a stage of processing within the magnocellular pathway. We discuss our results in relation to the widespread belief that area V5 in humans is specifically concerned with motion perception.