To organize various experiences in a coherent mental representation, we need to properly estimate the duration and temporal order of different events. Yet, our perception of time is noisy and vulnerable to various illusions. Studying these illusions can elucidate the mechanism by which the brain perceives time. In this talk, I will review a few studies on how the brain perceives duration of events and the temporal order between self-generated motion and sensory feedback. Combined with computational models at different levels, these experiments illustrated that the brain incorporates the prior knowledge of the statistical distribution of the duration of stimuli and the decay of memory when estimating duration of an individual event, and adjusts its perception of temporal order to changes in the statistics of the environment.