Abstract The apparent contraction of spatial separation between moving visual objects along the direction of motion (Space Contraction in Motion effect, SCM) occurs under both steady fixation and free looking conditions. In both cases the perceived spatial separation-in-motion for a given angular velocity does not depend on parameters of the moving objects themselves and equals a fixed proportion of the separation-at-rest. The perceived spatial separation decreases as angular velocity increases, defind in external rather than retinal coordinates. For a given angular velocity the spatial separation decreases as a function of factors increasing the perceived speed of motion. Thus both the perceived speed and the SCM effect are greater under steady fixation than under free looking conditions, and they both increase when motion takes place between more narrow screen borders. A hypothesis is proposed that SCM depends on perceived rather than objective velocity.