Our sense of body position and movement independent of vision (i.e., proprioception) relies on muscle spindle feedback and is vital for performing motor acts. In this study, we first sought to elucidate age-related differences in the central processing of proprioceptive information by stimulating foot muscle spindles and by measuring neural activation with functional magnetic resonance imaging. We found that healthy older adults activated a similar, distributed network of primary somatosensory and secondary-associative cortical brain regions as young individuals during the vibration-induced muscle spindle stimulation. A significant decrease in neural activity was also found in a cluster of right putamen voxels for the older age group when compared with the younger age group. Given these differences, we performed two additional analyses within each group that quantified the degree to which age-dependent activity was related to (1) brain structure and (2) a behavioral measure of proprioceptive ability. Using diffusion tensor imaging, older (but not younger) adults with higher mean fractional anisotropy were found to have increased right putamen neural activity. Age-dependent right putamen activity seen during tendon vibration was also correlated with a behavioral test of proprioceptive ability measuring ankle joint position sense in both young and old age groups. Partial correlation tests determined that the relationship between elderly joint position sense and neural activity in right putamen was mediated by brain structure, but not vice versa. These results suggest that structural differences within the right putamen are related to reduced activation in the elderly and potentially serve as biomarker of proprioceptive sensibility in older adults.