Visual feedback can facilitate or interfere with movement execution. Here, we describe behavioral and neural mechanisms by which the congruency of visual feedback during physical practice of a motor skill modulates subsequent performance gains. 18 healthy subjects learned to execute rapid sequences of right hand finger movements during fMRI scans either with or without visual feedback. Feedback consisted of a real-time, movement-based display of virtual hands that was either congruent (right virtual hand movement), or incongruent (left virtual hand movement yoked to the executing right hand). At the group level, right hand performance gains following training with congruent visual feedback were significantly higher relative to training without visual feedback. Conversely, performance gains following training with incongruent visual feedback were significantly lower. Interestingly, across individual subjects these opposite effects correlated. Activation in the Supplementary Motor Area (SMA) during training corresponded to individual differences in subsequent performance gains. Furthermore, functional coupling of SMA with visual cortices predicted individual differences in behavior. Our results demonstrate that some individuals are more sensitive than others to congruency of visual feedback during short-term motor learning and that neural activation in SMA correlates with such inter-individual differences.