Virtual Reality (VR) allows us to replace our visible body with a virtual self-representation (avatar) and to explore its effects on our body perception. While the feeling of owning and controlling a virtual body is widely researched, how VR affects the awareness of internal body signals (body awareness) remains open. Forty participants performed moving meditation tasks in reality and VR, either facing their mirror image or not. Both the virtual environment and avatars photorealistically matched their real counterparts. We found a negative effect of VR on body awareness, mediated by feeling embodied in and changed by the avatar. Further, we revealed a negative effect of a mirror on body awareness. Our results indicate that assessing body awareness should be essential in evaluating VR designs and avatar embodiment aiming at mental health, as even a scenario as close to reality as possible can distract users from their internal body signals.