A neural basis for distinguishing imagination from reality

Humans are able to imagine scenarios that are decoupled from the current environment by internally activating perceptual representations. While an efficient re-use of existing resources, it remains unknown how human observers classify perceptual signals as reflecting external reality, as opposed to internal simulation or imagination. Here we show that judgments of reality are underpinned by the combined strength of sensory activity generated by either imagery or perception in bilateral fusiform gyrus. Activity fluctuations in this region predict confusions between imagery and perception on a trial-by-trial basis and interact with a frontal brain network encoding binary judgments of reality. Our results demonstrate that a key mechanism through which the brain distinguishes imagination from reality is by monitoring the activity of mid-level visual cortex. These findings increase our understanding of failures of reality testing and lay the foundations for characterising a generalised perceptual reality monitoring system in the human brain.