How does the brain link visual stimuli across space and time? Visual illusions provide an experimental paradigm to study these processes. When two stationary dots are flashed in close spatial and temporal succession, human observers experience a percept of apparent motion. Large spatiotemporal separation challenges the visual system to keep track of object identity along the apparent motion path, the so-called “correspondence problem.” Here, we use voltage-sensitive dye imaging in primary visual cortex (V1) of awake monkeys to show that intracortical connections within V1 can solve this issue by shaping cortical dynamics to represent the illusory motion. We find that the appearance of the second stimulus in V1 creates a systematic suppressive wave traveling toward the retinotopic representation of the first. Using a computational model, we show that the suppressive wave is the emergent property of a recurrent gain control fed by the intracortical network. This suppressive wave acts to explain away ambiguous correspondence problems and contributes to precisely encode the expected motion velocity at the surface of V1. Together, these results demonstrate that the nonlinear dynamics within retinotopic maps can shape cortical representations of illusory motion. Understanding these dynamics will shed light on how the brain links sensory stimuli across space and time, by preformatting population responses for a straightforward read-out by downstream areas.