This study investigated the effects of the Ponzo illusion on three tasks: manual estimation of target width and peak grip aperture during pantomimed and natural prehension. The targets were three discs of 25 mm height and 20, 40 and 60 mm diameter. Illusory effects on perception were larger and less variable than effects on peak grip aperture during pantomimed reaching, and also were larger and less variable for targets at least 40 mm in diameter. Although a large, statistically significant perceptual illusion in the expected direction was induced for the 60-mm-diameter target, peak grip apertures during reaches to acquire the targets did not significantly differ due to high intersubject variability. However, in two of the six reaching conditions (two reaching tasks x three target sizes), individual differences in illusory effects on perception (perceived width of target placed over converging vs diverging lines) were strongly negatively correlated with individual differences in illusory effects on peak grip aperture during prehension (i.e., if object was perceived to be larger, peak grip aperture during reach was smaller). This unexpected correlation indicates that individuals with larger illusions of increased target size reached with reduced grip apertures. The strong relationship between effects on perception and action in two conditions may indicate shared visual processing by the perceptual and motor systems, with background visual information having opposite effects on the two systems.