The neural underpinnings of sensory processing differences in autism remain poorly understood. This prospective magnetoencephalography (MEG) study investigates whether children with autism show atypical cortical activity in the primary somatosensory cortex (S1) in comparison with matched controls. Tactile stimuli were clearly detectable, and painless taps were applied to the distal phalanx of the second (D2) and third (D3) fingers of the right and left hands. Three tactile paradigms were administered: an oddball paradigm (standard taps to D3 at an interstimulus interval (ISI) of 0.33 and deviant taps to D2 with ISI ranging from 1.32 s to 1.64 s); a slow-rate paradigm (D2) with an ISI matching the deviant taps in the oddball paradigm; and a fast-rate paradigm (D2) with an ISI matching the standard taps in the oddball. Study subjects were boys (age 7–11 years) with and without autism disorder. Sensory behavior was quantified using the Sensory Profile questionnaire. Boys with autism exhibited smaller amplitude left hemisphere S1 response to slow and deviant stimuli during the right-hand paradigms. In post-hoc analysis, tactile behavior directly correlated with the amplitude of cortical response. Consequently, the children were re-categorized by degree of parent-report tactile sensitivity. This regrouping created a more robust distinction between the groups with amplitude diminution in the left and right hemispheres and latency prolongation in the right hemisphere in the deviant and slow-rate paradigms for the affected children. This study suggests that children with autism have early differences in somatosensory processing, which likely influence later stages of cortical activity from integration to motor response. Autism Res 2012, 5: 340–351. © 2012 International Society for Autism Research, Wiley Periodicals, Inc.