It has become increasingly evident that human motor circuits are active during speech perception. However, the conditions under which the motor system modulates speech perception are not clear. Two prominent accounts make distinct predictions for how listening to speech engages speech motor representations. The first account suggests that the motor system is most strongly activated when observing familiar actions (Pickering and Garrod, 2013). Conversely, Wilson and Knoblich's account asserts that motor excitability is greatest when observing less familiar, ambiguous actions (Wilson and Knoblich, 2005). We investigated these predictions using transcranial magnetic stimulation (TMS). Stimulation of the lip and hand representations in the left primary motor cortex elicited motor evoked potentials (MEPs) indexing the excitability of the underlying motor representation. MEPs for lip, but not for hand, were larger during perception of distorted speech produced using a tongue depressor, relative to naturally produced speech. Additional somatotopic facilitation yielded significantly larger MEPs during perception of lip-articulated distorted speech sounds relative to distorted tongue-articulated sounds. Critically, there was a positive correlation between MEP size and the perception of distorted speech sounds. These findings were consistent with predictions made by Wilson & Knoblich (Wilson and Knoblich, 2005), and provide direct evidence of increased motor excitability when speech perception is difficult.