For precise interpersonal coordination, some degree of merging a sense of self with other is required. In group music making, one may want to be in "sync" with one's ensemble and, if playing a similar instrument, one can assume a degree of temporal and acoustic overlap. However, to what extent is selfother merging optimal? An incorrect balance of segregation and integration of self and other information would result in a lack of interpersonal cohesion or a disruption of self-agency. Using an interactive finger-tapping task with a virtual partner and functional MRI, we explored neural differences between self-other merging and distinction. Varying both the level of adaptivity of a virtual partner and the quality of self-related auditory feedback, we show that the predictability of the other and availability of distinguishable, self-related information improve performance and demonstrate how dynamic interactions vary one's sense of agency. From neuroimaging data, we identify regions that are more active when self and other are distinct, including the TPJ. Conversely, we observe activity in the cerebellum, EBA and SMA when self and other blur. These findings suggest that a certain degree of self-other distinction at sensorimotor, experiential, and neurophysiological levels is required to maintain successful interpersonal coordination.