Direction-selective cells in the fly visual system that have large receptive fields play a decisive role in encoding the time-dependent optic flow the animal encounters during locomotion. Recent experiments on the computations performed by these cells have highlighted the significance of dendritic integration and have addressed the role of spikes versus graded membrane potential changes in encoding optic flow information. It is becoming increasingly clear that the way optic flow is encoded in real time is constrained both by the computational needs of the animal in visually guided behaviour as well as by the specific properties of the underlying neuronal hardware.