By attaching arrows to a line's ends, the Müller-Lyer illusion can be used to modulate perceived line length. In the present study, we investigated the dynamics of the brain processes underlying this illusion using magnetoencephalography. Subjects were presented with a horizontal line with arrows attached to its ends. Across trials, the angles formed by the arrows were repeatedly changed such that 2 variants of the Müller-Lyer length illusion were either induced or not. The onset of both variants of the illusion revealed consistent activations in visual areas between 85 and 130 ms after stimulus onset, as well as strong and longer lasting activations along the ventral visual processing stream including inferior occipital, inferior temporal, and fusiform gyrus within the range of 195–220 ms. Subsequent neural activation was observed in the right superior temporal cortex, as well as in the right inferior parietal and the right inferior frontal cortex. The time course and the location of the activations suggest that the mechanisms involved in generating the Müller-Lyer illusion are closely linked to the ones associated with object perception, consistent with theories considering a relevant contribution of higher visual areas to the generation of the Müller-Lyer illusion.