In order to understand ongoing activity, observers segment it into meaningful temporal parts. Segmentation can be based on bottom‐up processing of distinctive sensory characteristics, such as movement features. Segmentation may also be affected by top‐down effects of knowledge structures, including information about actors' intentions. Three experiments investigated the role of movement features and intentions in perceptual event segmentation, using simple animations. In all conditions, movement features significantly predicted where participants segmented. This relationship was stronger when participants identified larger units than (...) when they identified smaller units, and stronger when the animations were generated randomly than when they were generated by goal‐directed human activity. This pattern suggests that bottom‐up processing played an important role in segmentation of these stimuli, but that this was modulated by top‐down influence of knowledge structures. To describe accurately how observers perceive ongoing activity, one must account for the effects of distinctive sensory characteristics, the effects of knowledge structures, and their interactions. (shrink)