Scientists have traditionally limited the mechanisms of social cognition to one brain, but recent approaches claim that interaction also realizes cognitive work. Experiments under constrained virtual settings revealed that interaction dynamics implicitly guide social cognition. Here we show that embodied social interaction can be constitutive of agency detection and of experiencing another's presence. Pairs of participants moved their “avatars” along an invisible virtual line and could make haptic contact with three identical objects, two of which embodied the other's motions, but only one, the other's avatar, also embodied the other's contact sensor and thereby enabled responsive interaction. Co-regulated interactions were significantly correlated with identifications of the other's avatar and reports of the clearest awareness of the other's presence. These results challenge folk psychological notions about the boundaries of mind, but make sense from evolutionary and developmental perspectives: an extendible mind can offload cognitive work into its environment.