The precision of mammalian movement relies on excitatory sensory feedback supplied by proprioceptors, and its context-dependent refinement by spinal inhibitory microcircuits. One microcircuit that has been implicated in the regulation of sensory input establishes inhibitory synapses directly on the central terminals of sensory neurons. To date, however, the difficulty in gaining selective access to discrete classes of inhibitory interneurons within local microcircuits has left unresolved the contribution of presynaptic inhibition, if any, to motor behavior. Here we have used mouse genetics to gain access to the set of GABAergic interneurons that provide direct input to sensory terminals, and show that their activation evokes the defining physiological features of presynaptic inhibition. Genetic ablation of this set of interneurons in the adult severely perturbs goal-directed reaching movements, and uncovers a pronounced forelimb motor oscillation that appears to have its basis in an enhancement in the gain of sensory feedback. Together, our findings uncover an essential motor behavioral role for this specialized set of presynaptic inhibitory interneurons, and emphasize the relevance of sensory gain control in the neural programming of skilled movement.