Tools and hands are functionally related through their common role in action. In two fMRI studies we show that this functional relationship is reflected in the spatial distribution of hand- and tool-selective responses in the higher-level visual cortex. Results from Study 1 (N = 15) showed that the processing of tools and hands (relative to mammals and scenes) recruited overlapping regions in left lateral occipitotemporal cortex (LOTC). This overlap was unlikely to be related to shared implied motion or general object processing properties, since motion-selective regions (hMT) and object-selective regions (LO) were located posterior to the tool-hand cluster, and did not respond selectively to either hands or tools. Study 2 (N = 15) investigated whether the tool-hand overlap in left LOTC is specific to hands or generalizes to other body parts. Individual-subject region-of-interest analysis showed that tool-selective responses were more closely overlapping with hand-selective responses (80% overlap) than they were with non-hand body-part selective responses (38% overlap). Moreover, multi-voxel pattern analysis in left LOTC indicated a surprising degree of similarity between multi-voxel response patterns to tools and hands, but not between tools and other body parts. Together, these results indicate that tools and hands are represented in closely overlapping left occipitotemporal regions, despite differences in visual appearance and animacy. We propose that the functional organization of higher-level visual cortex is partly determined by the type of information that objects provide and specific network connectivity constraints: form-related object representations have to interact with those brain regions that specify the functional role of the objects (e.g. the left-lateralized fronto-parietal action network).