This study examines motor cortical representation of hand position and its relationship to the representation of hand velocity during reaching movements. 978 motor cortical neurons were recorded from the proximal arm area of rostral motor cortex. The results demonstrate that position and velocity are encoded by single motor cortical neurons simultaneously in an additive fashion and that the relative weights of the position and velocity signals change dynamically during reaching. The two variables - hand position and hand velocity - are highly correlated in the standard center-out reaching task. A new reaching task (standard reaching) is introduced to minimize these correlations. Likewise, a new decoding method (indirect OLE) was developed to analyze the data by simultaneously decoding both three dimensional (3D) hand position and 3D hand velocity from correlated neural activity. This method shows that on average, the reconstructed velocity led the actual hand velocity by 122 ms, while the reconstructed position signal led the actual hand position by 81 ms.