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Sensor neurons, like those in the visual cortex, display specific functional properties, e.g., tuning for the orientation, direction and velocity of a moving stimulus. It is still unclear how these properties arise from the processing of the inputs which converge at a given cell. Specifically, little is known how such properties can develop by ways of synaptic plasticity. In this study we investigate the hypothesis that velocity sensitivity can develop at a neuron from different types of synaptic plasticity at different dendritic sub-structures. Specifically we are implementing spike-timing dependent plasticity at one dendritic branch and conventional long-term potentiation at another branch, both driven by dendritic spikes triggered by moving inputs. In the first part of the study, we show how velocity sensitivity can arise from such a spatially localized difference in the plasticity. In the second part we show how this scenario is augmented by the interaction between dendritic spikes and back-propagating spikes also at different dendritic branches. Recent theoretical (Saudargiene et al. in Neural Comput 16:595–626, 2004) and experimental (Froemke et al. in Nature 434:221–225, 2005) results on spatially localized plasticity suggest that such processes may play a major role in determining how synapses will change depending on their site. The current study suggests that such mechanisms could be used to develop the functional specificities of a neuron.