The neural substrate of bodily ownership can be disclosed by the rubber hand illusion (RHI); namely, the illusory self-attribution of an artificial hand that is induced by synchronous tactile stimulation of the subject's hand that is hidden from view. Previous studies have pointed to the premotor cortex (PMC) as a pivotal area in such illusions. To investigate the effective connectivity between – and within – sensory and premotor areas involved in bodily perceptions, we used dynamic causal modeling of touch-evoked responses in 13 healthy subjects. Each subject's right hand was stroked while viewing their own hand (“REAL”), or an artificial hand presented in an anatomically plausible (“CONGRUENT”) or implausible (“INCONGRUENT”) position. Bayesian model comparison revealed strong evidence for a differential involvement of the PMC in the generation of touch-evoked responses under the three conditions, confirming a crucial role of PMC in bodily self-attribution. In brief, the extrinsic (forward) connection from left occipital cortex to left PMC was stronger for CONGRUENT and INCONGRUENT as compared to REAL, reflecting the augmentation of bottom-up visual input when multisensory integration is challenged. Crucially, intrinsic connectivity in the primary somatosensory cortex (S1) was attenuated in the CONGRUENT condition, during the illusory percept. These findings support predictive coding models of the functional architecture of multisensory integration (and attenuation) in bodily perceptual experience.