Effective tool use relies on the integration of multisensory signals related to one's body and the tool. It has been shown that active tool use results in an extension of peripersonal space, i. e., the space directly surrounding the human body. In the present studies we investigated whether the mere observation of a virtual tool that could be manipulated via a haptic robotic interface would also affect the perception of peripersonal space. Participants passively observed a tool being used (Study 1) and received simple visuotactile feedback related to the tool (Study 2). We assessed the extension of peripersonal space by using the crossmodal congruency task, which measures the interference of observed visual distractors presented at the tool on judgments about tactile stimuli presented to the fingers. We found that passive observation of tool use resulted in a crossmodal congruency effect for both crossed and uncrossed arm/tool use postures (Study 1). This effect was even more pronounced when participants were presented with simple visuo-tactile feedback during the observation phase (Study 2). These findings suggest that additional visuotactile feedback enhances the integration of the tools into the body schema. We discuss the relevance of these findings for the development of surgical robotics, virtual tool use and for motor rehabilitation.