The sense of a bodily self is thought to depend on adaptive weighting and integration of bodily afferents and prior beliefs. Evidence from studies using paradigms such as the rubber hand illusion and full body illusion suggests changes in the integration of visuotactile bodily signals throughout childhood. Here, we extended this line of research by assessing how bottom-up visuomotor synchrony and expectancy, modulated by visual appearance of virtual avatars, contribute to embodiment in children. We compared responses to a first-person perspective virtual full body illusion from 8-12-year-old children and adults, while manipulating synchrony of the avatar’s movements (synchronous, 0.5 s, 1 s delay compared to the participant’s movements), and appearance of the avatar (human or skeleton). We measured embodiment with both subjective questionnaires and objective skin conductance responses to virtual threat. Results showed that children experienced ownership for the virtual avatar in a similar way to adults, which was reduced with increasing asynchrony, and for the skeleton avatar as compared to the human avatar. This modulation of ownership was not reflected in the skin conductance responses, which were equally high in all experimental conditions and only showed a modulation of repetition by age. Contrastingly, in children, the subjective experience of agency was less affected by the dampening effects of visuomotor asynchrony or reduced human likeness, and overall higher. These findings suggest that children can easily embody a virtual avatar, but that different aspects of embodiment develop at different rates, which could have important implications for applications of embodied virtual reality.