Our eyes, bodies, and perspectives are constantly shifting as we observe the world. Despite this, we are very good at distinguishing between self-caused visual changes and changes in the environment: the world appears mostly stable despite our visual field moving around. This, it seems, also occurs when we are dreaming. As we visually investigate the dream environment, we track moving objects with our dream eyes, examine objects, and shift focus. These movements, research suggests, are reflected in the rapid movements or saccades of our sleeping eyes. Do we really see the dream world in the same way that we see the real world? If we do, how could dreaming, usually assumed to be mind-generated hallucinations, replicate such an experience? This problem would be deflated if dreams are not hallucinations at all, but rather imagination, illusion or simply unrealistic. I argue that imagination and illusion views do not satisfactorily explain away the problem of vision and action in sleep. The imagination model is not a complete description of dreaming that is consistent with empirical research, and it is unlikely that the visual dream world is an illusion. Given that the dreaming visual experience is most likely active, hallucinatory, and at times a realistic world simulation, there are important implications for our understanding of visual perception and its relationship to movement. Evidence suggests that our dream eyes investigate the dream world as our waking eyes investigate the waking world. If changes to the unconsciously generated dream environment are perceived as external and unintentional while dream body movements are perceived as self-generated and intentional, current theory of visual perception may have to be expanded to account for how the dreaming mind generates a stable world in which we track and visually explore mind-generated objects.