We found a new haptic illusion that is induced by a combination of a tactile stimulus and motor activity. When we presented a continuous vibratory tactile stimulus to the palm while moving the forearm vertically, a feeling of elasticity or "a soft rubber ball bouncing on the palm" is generated. We hypothesized that this illusion is caused by a well-known tactile suppression during motor activity. In the first of two experiments, we measured the optimal vibratory frequency for the illusion. In the second experiment, we measured the temporal behavior of tactile sensitivity to the vibration on the palm during periodical forearm motion. Based on the results of the experiments, we considered the mechanism of the illusion. ©2010 IEEE.