Effective movement planning should take into account the consequences of possible errors in executing a planned movement. These errors can result from either sensory uncertainty or variability in movement planning and production. We examined the ability of humans to compensate for variability in sensory estimation and movement production under conditions in which variability is increased artificially by the experimenter. Subjects rapidly pointed at a target region that had an adjacent penalty region. Target and penalty hits yielded monetary rewards and losses. We manipulated the task-relevant variability by perturbing visual feedback of finger position during the movement. The feedback was shifted in a random direction with a random amplitude in each trial, causing an increase in the task-relevant variability. Subjects were unable to counteract this form of perturbation. Rewards and penalties were based on the perturbed, visually specified finger position. Subjects rapidly acquired an estimate of their new variability in <120 trials and adjusted their aim points accordingly. We compared subjects' performance to the performance of an optimal movement planner maximizing expected gain. Their performance was consistent with that expected from an optimal movement planner that perfectly compensated for externally imposed changes in task-relevant variability. When exposed to novel stimulus configurations, aim points shifted in the first trial without showing any detectable trend across trials. These results indicate that subjects are capable of changing their pointing strategy in the presence of externally imposed noise. Furthermore, they manage to update their estimate of task-relevant variability and to transfer this estimate to novel stimulus configurations.