We used a blocked fMRI design to investigate the neural mechanisms of action planning in internal versus external space. The subject's arm was positioned alongside the body with the forearm semi-pronated. Vertical position of a cursor on the screen was controlled by finger flexion/extension measured with an MRI-compatible data glove. For each trial, subjects moved a cursor within from a centrally-positioned start to an upper or lower target. An MRI-compatible torque motor randomly rotated the forearm into pro/supination. In separate blocks, forearm rotation occurred before or after the target appeared, forcing a motor plan update based on target position or on forearm orientation, respectively. In control blocks, the target and forearm orientation remained consistent, so as not to require trial-to-trial re-planning. Re-planning in internal space was associated with activation in the left ventral premotor cortex and bilateral inferior parietal lobule. Replanning in external space was associated with activation in the superior parietal lobule. These data build on the role of premotor and parietal cortices in sensorimotor transformations.