In the domain of motor learning it has been difficult to separate the neural substrate of encoding from that of change in performance. Consequently, it has not been clear whether motor effector areas participate in learning or merely modulate changes in performance. Here, using a variant of the serial reaction time task that dissociated these two factors, we report that encoding during procedural motor learning does engage cortical motor areas and can be characterized by distinct early and late encoding phases. The highest correlation between activation and subsequent changes in motor performance was seen in the motor cortex during early encoding, and in the basal ganglia during the late encoding phase. Our results show that rapid encoding during procedural motor learning involves several distinct processes, and is represented primarily within motor system structures.