Hand manipulation neurons in areas 5 and 7b/anterior intraparietal area (AIP) of posterior parietal cortex were analyzed in three macaque monkeys during a trained prehension task. Digital video recordings of hand kinematics synchronized to neuronal spike trains were used to correlate firing rates of 128 neurons with hand actions as the animals grasped and lifted rectangular and round objects. We distinguished seven task stages: approach, contact, grasp, lift, hold, lower, and relax. Posterior parietal cortex (PPC) firing rates were highest during object acquisition; 88% of task-related area 5 neurons and 77% in AIP/7b fired maximally during stages 1, 2, or 3. Firing rates rose 200–500 ms before contact, peaked at contact, and declined after grasp was secured. 83% of area 5 neurons and 72% in AIP/7b showed significant increases in mean rates during approach as the fingers were preshaped for grasp. Somatosensory signals at contact provided feedback concerning the accuracy of reach and helped guide the hand to grasp sites. In error trials, tactile information was used to abort grasp, or to initiate corrective actions to achieve task goals. Firing rates declined as lift began. 41% of area 5 neurons and 38% in AIP/7b were inhibited during holding, and returned to baseline when grasp was relaxed. Anatomical connections suggest that area 5 provides somesthetic information to circuits linking AIP/7b to frontal motor areas involved in grasping. Area 5 may also participate in sensorimotor transformations coordinating reach and grasp behaviors and provide on-line feedback needed for goal-directed hand movements.