Recent research has shown that heartbeat-evoked potentials (HEPs), brain activity in response to heartbeats, are a useful neural measure for investigating the functional role of brain-body interactions in cognitive processes including self-consciousness. In 2 experiments, using intracranial electroencephalography (EEG), we investigated (1) the neural sources of HEPs, (2) the underlying mechanisms for HEP generation, and (3) the functional role of HEPs in bodily self-consciousness. In Experiment-1, we found that shortly after the heartbeat onset, phase distributions across single trials were significantly concentrated in 10% of the recording sites, mainly in the insula and the operculum, but also in other regions including the amygdala and fronto-temporal cortex. Such phase concentration was not accompanied by increased spectral power, and did not correlate with spectral power changes, suggesting that a phase resetting, rather than an additive "evoked potential" mechanism, underlies HEP generation. In Experiment-2, we further aimed to anatomically refine previous scalp EEG data that linked HEPs with bodily self-consciousness. We found that HEP modulations in the insula reflected an experimentally induced altered sense of self-identification. Collectively, these results provide novel and solid electrophysiological evidence on the neural sources and underlying mechanisms of HEPs, and their functional role in self-consciousness.