The actionable space surrounding the body, referred to as peripersonal space (PPS), has been the subject of significant interest of late within the broader framework of embodied cognition. Neurophysiological and neuroimaging studies have shown the representation of PPS to be built from visuotactile and audiotactile neurons within a frontoparietal network and whose activity is modulated by the presence of stimuli in proximity to the body. In contrast to single-unit and fMRI studies, an area of inquiry that has received little attention is the EEG characterization associated with PPS processing. Furthermore, although PPS is encoded by multisensory neurons, to date there has been no EEG study systematically examining neural responses to unisensory and multisensory stimuli, as these are presented outside, near, and within the boundary of PPS. Similarly, it remains poorly understood whether multisensory integration is generally more likely at certain spatial locations (e.g., near the body) or whether the cross-modal tactile facilitation that occurs within PPS is simply due to a reduction in the distance between sensory stimuli when close to the body and in line with the spatial principle of multisensory integration. In the current study, to examine the neural dynamics of multisensory processing within and beyond the PPS boundary, we present auditory, visual, and audiovisual stimuli at various distances relative to participants' reaching limit—an approximation of PPS—while recording continuous high-density EEG. We question whether multisensory (vs. unisensory) processing varies as a function of stimulus–observer distance. Results demonstrate a significant increase of global field power (i.e., overall strength of response across the entire electrode montage) for stimuli presented at the PPS boundary—an increase that is largest under multisensory (i.e., audiovisual) conditions. Source localization of the major contributors to this global field power difference suggests neural generators in the intraparietal sulcus and insular cortex, hubs for visuotactile and audiotactile PPS processing. Furthermore, when neural dynamics are examined in more detail, changes in the reliability of evoked potentials in centroparietal electrodes are predictive on a subject-by-subject basis of the later changes in estimated current strength at the intraparietal sulcus linked to stimulus proximity to the PPS boundary. Together, these results provide a previously unrealized view into the neural dynamics and temporal code associated with the encoding of nontactile multisensory around the PPS boundary.