The human brain is specialized for face processing, yet we sometimes perceive illusory faces in objects. It is unknown whether these natural errors of face detection originate from a rapid process based on visual features or from a slower, cognitive re-interpretation. Here we use a multifaceted approach to understand both the spatial distribution and temporal dynamics of illusory face representation in the brain by combining functional magnetic resonance imaging and magnetoencephalography neuroimaging data with model-based analysis. We find that the representation of illusory faces is confined to occipital-temporal face-selective visual cortex. The temporal dynamics reveal a striking evolution in how illusory faces are represented relative to human faces and matched objects. Illusory faces are initially represented more similarly to real faces than matched objects are, but within ~250 ms, the representation transforms, and they become equivalent to ordinary objects. This is consistent with the initial recruitment of a broadly-tuned face detection mechanism which privileges sensitivity over selectivity.