Neural representation of somatosensory events undergoes major transformation in the primary somatosensory cortex (SI) from its original, more or less isomorphic, form found at the level of peripheral receptors. A large body of SI optical imaging, neural recording and psychophysical studies suggests that SI representation of stimuli encountered in everyday life is a product of dynamic processes that involve competitive interactions at multiple levels of cortical organization. Such interactions take place among neighboring neurons, among local groups of minicolumns, among neighboring macrocolumns, between SI and SII, between Pacinian and non-Pacinian channels, and bilaterally between homotopic somatosensory regions of the opposite hemispheres. Together these interactions sharpen SI response to suprathreshold and time-extended tactile stimuli by funneling the initially widespread stimulus-triggered activity in SI into the local group of macrocolumns most directly driven by the stimulus. Those macrocolumns in turn fractionate into stimulus-specific patterns of differentially active minicolumns. Thus SI dynamically shapes its representation of a tactile stimulus by selecting among all of its neurons initially activated by the stimulus a subset of neurons with receptive-field and feature-tuning properties closely matching those of the stimulus. Through this stimulus-directed dynamical selection process, which operates on a scale of hundreds of milliseconds, SI achieves a more faithful representation of stimulus properties, which is reflected in improved performance on tactile perceptual tasks.