Masquerade is a defence tactic in which a prey resembles an inedible or inanimate object thus causing predators to misclassify it. Most masquerade colour patterns are static although some species adopt postures or behaviours to enhance the effect. Dynamic masquerade in which the colour pattern can be changed is rare. Here we report a two-step sensory process that enables an additional novel capability known only in cuttlefish and octopus: morphing three-dimensional physical skin texture that further enhances the optical illusions created by coloured skin patterns. Our experimental design incorporated sequential sensory processes: addition of a three-dimensional rock to the testing arena, which attracted the cuttlefish to settle next to it; then visual processing by the cuttlefish of physical textures on the rock to guide expression of the skin papillae, which can range from fully relaxed (smooth skin) to fully expressed (bumpy skin). When a uniformly white smooth rock was presented, cuttlefish moved to the rock and deployed a uniform body pattern with mostly smooth skin. When a rock with small-scale fragments of contrasting shells was presented, the cuttlefish deployed mottled body patterns with strong papillae expression. These robust and reversible responses indicate a sophisticated visual sensorimotor system for dynamic masquerade.