Empirical research on the bodily self has only recently started to investigate how the link between a body and the experience of this body as mine is developed, maintained or disturbed. The Rubber Hand Illusion has been used as a model instance of the normal sense of embodiment to investigate the processes that underpin the experience of body-ownership. This review puts forward a neurocognitive model according to which body-ownership arises as an interaction between current multisensory input and internal models of the body. First, a pre-existing stored model of the body distinguishes between objects that may or may not be part of one's body. Second, on-line anatomical and postural representations of the body modulate the integration of multisensory information that leads to the recalibration of visual and tactile coordinate systems. Third, the resulting referral of tactile sensation will give rise to the subjective experience of body-ownership. These processes involve a neural network comprised of the right temporoparietal junction which tests the incorporeability of the external object, the secondary somatosensory cortex which maintains an on-line representation of the body, the posterior parietal and ventral premotor cortices which code for the recalibration of the hand-centred coordinate systems, and the right posterior insula which underpins the subjective experience of body-ownership. The experience of body-ownership may represent a critical component of self-specificity as evidenced by the different ways in which multisensory integration in interaction with internal models of the body can actually manipulate important physical and psychological aspects of the self.