Hand action can bias the perceived direction of ambiguously moving objects (Wohlschlager, 2000 Vision Research 40 925–930). A common coding framework has been proposed to account for action–perception interaction, assuming goal-based feature matching between action and perception [Prinz, 2003, in Agency and Self-Awareness (New York: Oxford University Press)]. I investigated whether and how movement representation and a distal action goal are implicated in biased motion perception using a stream–bounce display as stimulus. By moving a mouse, participants controlled the progression of disks, which were initially separated and then moved toward each other. Mouse movement was found to bias perception toward the stream when the directional motion of the mouse and disk were consistent; however, this biased perception was not observed when the directions were orthogonal. Subsequent experiments revealed that this induced stream percept could not be attributed to the processes of attention, and the action goal of disk control was critical to the occurrence of biased motion perception. These results suggest that feature matching occurs at the level of movement representation, and the action goal is important in linking movement representation to perceptual representation.