Reward and punishment are potent modulators of associative learning in instrumental and classical conditioning. However, the effect of reward and punishment on procedural learning is not known. The striatum is known to be an important locus of reward-related neural signals and part of the neural substrate of procedural learning. Here, using an implicit motor learning task, we show that reward leads to enhancement of learning in human subjects, whereas punishment is associated only with improvement in motor performance. Furthermore, these behavioral effects have distinct neural substrates with the learning effect of reward being mediated through the dorsal striatum and the performance effect of punishment through the insula. Our results suggest that reward and punishment engage separate motivational systems with distinctive behavioral effects and neural substrates.