Developmental dyslexia (DD) is a heritable neurodevelopmental reading disorder that could arise from auditory, visual, and cross-modal integration deficits. A deletion in intron 2 of the DCDC2 gene (hereafter DCDC2d) increases the risk for DD and related phenotypes. In this study, first we report that illusory visual motion perception-specifically processed by the magnocellular-dorsal (M-D) stream-is impaired in children with DD compared with age-matched and reading-level controls. Second, we test for the specificity of the DCDC2d effects on the M-D stream. Children with DD and DCDC2d need significantly more contrast to process illusory motion relative to their counterpart without DCDC2d and to age-matched and reading-level controls. Irrespective of the genetic variant, children with DD perform normally in the parvocellular-ventral task. Finally, we find that DCDC2d is associated with the illusory motion perception also in adult normal readers, showing that the M-D deficit is a potential neurobiological risk factor of DD rather than a simple effect of reading disorder. Our findings demonstrate, for the first time, that a specific neurocognitive dysfunction tapping the M-D stream is linked with a well-defined genetic susceptibility.