Many natural behaviors involve closed feedback loops in which ongoing sensory input refines motor behavior. Previous research on tactile localization, however, has implemented localization as open-loop behavior. For instance, participants indicate a touched position on a silhouette shape of the body or on an occluding board mounted above the hand. Such studies have suggested that humans often make large errors when localizing touch on the skin, or that ‘perceptual body representations’ are distorted. However, by artificially preventing tactile feedback from the target body area, the natural action- perception loop is interrupted. Therefore, these localization approaches may underestimate individuals’ localization ability and draw erroneous conclusions about the role and precision of body representations. Here, we tested tactile localization in a natural setting, in which participants first received brief touches on their left forearm and then searched for the target location by moving the right index finger across the skin. Tactile search reduced localization error when the searching finger was far from, but not when it was near the target, resulting in a remaining error of 1-2 cm. Error reduction was absent when participants searched on an acrylic barrier mounted above the arm, suggesting that availability of tactile feedback on the target arm but not proprioceptive and motor signals of the searching arm determined precision, thus confirming the pivotal role of closed-loop sensory feedback for tactile localization. We suggest that actively produced online tactile feedback routinely refines coarse spatial body representations, similar to the refinement of sparse spatial representations in visual memory through consecutive saccades.