Arm movements can easily be adapted to different biomechanical constraints. However, the cortical representation of the processing of visual input and its transformation into motor commands remains poorly understood. In a visuo-motor dissociation paradigm, subjects were presented with a 3-D computer-graphical representation of a human arm, presenting movements of the subjects' right arm either as right or left arm. In order to isolate possible effects of coordinate transformations, coordinate mirroring at the body midline was implemented independently. In each of the resulting four conditions, 10 normal, right-handed subjects performed three runs of circular movements, while being scanned with O(15)-Butanol-PET. Kinematic analysis included orientation and accuracy of a fitted ellipsoid trajectory. Imaging analysis was performed with SPM 99 with activations threshold at P < 0.0001 (not corrected). The shape of the trajectory was dependent on the laterality of the arm, irrespective of movement mirroring, and accompanied by a robust activation difference in the contralateral precuneus. Movement mirroring decreased movement accuracy, which was related to increased activation in the left insula. Those two movement conditions that cannot be observed in reality were related to an activation focus at the left middle temporal gyrus, but showed no influence on movement kinematics. These findings demonstrate the prominent role of the precuneus for mediating visuo-motor transformations and have implications for the use of mirror therapy and virtual reality techniques, especially avatars, such as Nintendo Wii in neurorehabilitation.