Two phenomena can be observed in the watercolor illusion: illusory color spreading and figure-ground organization. We performed experiments to determine whether the figure-ground effect is a consequence of the color illusion or due to an independent mechanism. Subjects were tested with displays consisting of six adjacent compartments--three that generated the illusion alternating with three that served for comparison. In a first set of experiments, the illusory color was measured by finding the matching physical color in the alternate compartments. Figureness (probability of 'figure' responses, 2AFC) of the watercolor compartments was then determined with and without the matching color in the alternate compartments. The color match reduced figureness, but did not abolish it. There was a range of colors in which the watercolor compartments dominated as figures over the alternate compartments although the latter appeared more saturated in color. In another experiment, the effect of tinting alternate compartments was measured in displays without watercolor illusion. Figureness increased with color contrast, but its value at the equivalent contrast fell short of the figureness value obtained for the watercolor pattern. Thus, in both experiments, figureness produced by the watercolor pattern was stronger than expected from the color effect, suggesting independent mechanisms. Considering the neurophysiology, we propose that the color illusion follows from the principles of representation of surface color in the visual cortex, while the figure-ground effect results from two mechanisms of border ownership assignment, one that is sensitive to asymmetric shape of edge profile, the other to consistency of color borders.