Computer interaction via visually guided hand movements often employs either abstract cursor-based feedback or virtual hand (VH) representations of varying degrees of realism. The effect of changing this visual feedback in virtual reality settings is currently unknown. In this study, 19 healthy right-handed adults performed index finger movements ("action") and observed movements ("observation") with four different types of visual feedback: a simple circular cursor (CU), a point light (PL) pattern indicating finger joint positions, a shadow cartoon hand (SH) and a realistic VH. Finger movements were recorded using a data glove, and eye-tracking was recorded optically. We measured brain activity using functional magnetic resonance imaging (fMRI). Both action and observation conditions showed stronger fMRI signal responses in the occipitotemporal cortex compared to baseline. The action conditions additionally elicited elevated bilateral activations in motor, somatosensory, parietal, and cerebellar regions. For both conditions, feedback of a hand with a moving finger (SH, VH) led to higher activations than CU or PL feedback, specifically in early visual regions and the occipitotemporal cortex. Our results show the stronger recruitment of a network of cortical regions during visually guided finger movements with human hand feedback when compared to a visually incomplete hand and abstract feedback. This information could have implications for the design of visually guided tasks involving human body parts in both research and application or training-related paradigms.