Prior expectations can alter decisions about a stimulus. This prior may modify sensory encoding of the stimulus, or how the decision emerges from sensory evidence. Since area LIP has been proposed to accumulate evidence in a direction discrimination task , we examined how prior knowledge modifies activity in LIP. In our task, an arrow-shaped cue, pointing in one of two opposite directions, is presented for 200ms at the fovea. Following a delay, a foveal random-dot motion stimulus is displayed. The stimulus contained variable-coherence motion either along or opposite to the cued direction . Cue direction matched that of the motion on 67% of trials. Behavioral data show that the monkey integrates its prior expectation with the motion information to improve performance. Stimuli were configured so that one saccade target (T1) lay within the neuron's response field (RF). LIP responses were elevated when the monkey expected motion toward the RF. Following the cue, the response increased on trials with cues towards the RF, and decreased for cues pointing away from the RF. This shift in activity persisted during the motion stimulus and into the period where LIP activity ramps up before a T1-choice. The slope of the ramping activity before T1 choices was not increased by a valid cue, consistent with our previous finding  that the cue had essentially no effect on responses in area MT. Together, these findings suggest that prior knowledge acts on the computation of decision variables rather than on the sensory representation of motion.