Sound can alter visual perception. This has been recently demonstrated by a strong illusion in which a single flash is perceived as multiple flashes when accompanied by multiple brief sounds. While psychophysical findings on this sound-induced flash illusion indicate that the modulations of visual percept by sound occur at a perceptual processing level, it remains unclear at what level of perceptual processing these interactions occur and what mechanisms mediate them. Here we investigated these questions using MEG. We found modulation of activity in occipital and parietal scalp locations, when comparing illusion trials with visual-alone and auditory-alone trials. This modulation occurred as early as 35-65 ms from the onset of the visual stimulus. Activity was also modulated in the occipital and parietal areas as well as anterior areas at a later ( approximately 150 ms post-stimulus) onset. No significant interactions were observed in occipital and parietal areas in trials in which illusion was not perceived. These results indicate that the auditory alteration of visual perception as reflected by the illusion is associated with modulation of activity in visual cortex. The early onset of these modulations suggests that a feed-forward or lateral circuitry is at least partially involved in these interactions.