Substantial data from the cognitive neurosciences point to the importance of bodily processing for the development of a comprehensive theory of the self. A key aspect of the bodily self is self-location, the experience that the self is localized at a specific position in space within one's bodily borders (embodied self-location). Although the neural mechanisms of self-location have been studied by manipulating the spatial location of one's visual perspective during mental imagery, such experiments were conducted in constrained, explicit, and unecological contexts such as explicit instructions in a prone/seated position, although most human interactions occur spontaneously while standing/walking. Using a motor paradigm, we investigated the behavioral and neural mechanisms of spontaneous self-location and mental body transformations during active human interaction. Using own-body imagery using spontaneous and explicit changes in self-location in standing participants, we report that spontaneous interactions with an avatar are neurally indistinguishable from explicit own-body transformation with disembodied self-location but differ from explicit own-body transformation with embodied self-location at 400-600 ms after stimulus onset. We discuss these findings with respect to the neural mechanisms of perspective-taking and self-location in spontaneous human interaction.