Modification of Restle's theory (1970) explains the moon illusion and related phenomena on the basis of three principles: (1) The apparent sizes of objects are their perceived visual angles. (2) The apparent size of the moon is determined by the ratio of the angular extent of the moon relative to the extents subtended by objects composing the surrounding context, such as the sky and things on the ground. (3) The visual extents subtended by common objects of a constant physical size decrease systematically with increasing distance from the observer. Further development of this theory requires specification of both the components of the surrounding context and their relative importance in determining the apparent size and distance of the moon.