Spatial realignment of visual and proprioceptive estimates of hand position is necessary both to keep the estimates in register over time and to compensate for sensory perturbations. Such realignment affects perceived hand position, which the brain must use to plan hand movements. We would therefore expect visuo-proprioceptive realignment to affect the motor system at some level, but the physiological basis of this interaction is unknown. Here, we asked whether activity in primary motor cortex (M1), a well-known substrate of motor control, shows evidence of change after visuo-proprioceptive realignment. In two sessions each, 32 healthy adults experienced spatially misaligned or veridical visual and proprioceptive information about their static left index finger. Participants indicated perceived finger position with no performance feedback or knowledge of results. Using TMS over the M1 representation of the misaligned finger, we found no average difference between sessions. However, regression analysis indicated that, in the misaligned session only, proprioceptive realignment was linked with a decrease in M1 activity and visual realignment was linked with an increase in M1 activity. Proprioceptive and visual realignment were inversely related to each other. These results suggest that visuo-proprioceptive realignment does indeed have a physiological impact on the motor system. The lack of a between-session mean difference in M1 activity suggests that the basis of the effect is not the multisensory realignment computation itself, independent of modality. Rather, the changes in M1 are consistent with a modality-specific neural mechanism, such as modulation of somatosensory cortex or dorsal stream visual areas that impact M1.