Neurological evidence suggests that disturbed vestibular processing may play a key role in triggering out-of-body experiences (OBEs). Little is known about the brain mechanisms during such pathological conditions, despite recent experimental evidence that the scientific study of such experiences may facilitate the development of neurobiological models of a crucial aspect of self-consciousness: embodied self-location. Here we apply Bayesian modeling to vestibular processing and show that OBEs and the reported illusory changes of self-location and translation can be explained as the result of a mislead Bayesian inference, in the sense that ambiguous bottom-up signals from the vestibular otholiths in the supine body position are integrated with a top-down prior for the upright body position, which we measure during natural head movements. Our findings have relevance for self-location and translation under normal conditions and suggest novel ways to induce and study experimentally both aspects of bodily self-consciousness in healthy subjects.