We used functional magnetic resonance imaging (fMRI) to study neural correlates of a robust somatosensory illusion that can dissociate tactile perception from physical stimulation. Repeated rapid stimulation at the wrist, then near the elbow, can create the illusion of touches at intervening locations along the arm, as if a rabbit hopped along it. We examined brain activity in humans using fMRI, with improved spatial resolution, during this version of the classic cutaneous rabbit illusion. As compared with control stimulation at the same skin sites (but in a different order that did not induce the illusion), illusory sequences activated contralateral primary somatosensory cortex, at a somatotopic location corresponding to the filled-in illusory perception on the forearm. Moreover, the amplitude of this somatosensory activation was comparable to that for veridical stimulation including the intervening position on the arm. The illusion additionally activated areas of premotor and prefrontal cortex. These results provide direct evidence that illusory somatosensory percepts can affect primary somatosensory cortex in a manner that corresponds somatotopically to the illusory percept.