Reinforcing effects of reward on action are well established, but possible effects on sensory function are less well explored. Here, using functional magnetic resonance imaging, we assessed whether reward can influence somatosensory judgments and modulate activity in human somatosensory cortex. Participants discriminated electrical somatosensory stimuli on an index finger with correct performance rewarded financially at trial end, at one of four different anticipated levels. Higher rewards improved tactile performance and led to increased hemodynamic signals from ventral striatum on rewarded trials. Remarkably, primary somatosensory cortex contralateral to the judged hand was reactivated at the point of reward delivery, despite the absence of concurrent somatosensory input at that time point. This side-specific reactivation of primary somatosensory cortex increased monotonically with level of reward. Moreover, the level of reward received on a particular trial influenced somatosensory performance and neural activity on the subsequent trial, with better discrimination and enhanced hemodynamic response in contralateral primary somatosensory cortex for trials that followed higher rewards. These results indicate that rewards can influence not only classical reward-related regions, but also early somatosensory cortex when a decision is required for that modality.