arXiv:2610.18855v2 Announce Type: replace Abstract: Contact-rich manipulation requires robots to coordinate not only where to move, but also how contact and force should evolve throughout an interaction. Yet most robot policies represent actions primarily as motion trajectories, using tactile signals as inputs or auxiliary prediction targets without explicitly encoding contact dynamics in the action representation. We propose ILA (Interaction Latents as Actions), which uses decodable interaction latents that jointly capture the evolution of motion, contact, and force application as policy action units, providing a shared representation for action generation, evaluation, and offline improvement. We learn these latents through visually conditioned joint action-tactile reconstruction with a time-conditioned implicit decoder. Using them as flow-matching generation targets supports post-training of pretrained vision-language-action models (VLAs) and world action models (WAMs), as well as training flow-matching policies from scratch. A shared decoder maps generated latents to executable actions. For offline improvement, we learn a tactile-conditioned expert reference model from interaction latents encoded from expert demonstrations. The resulting expert-consistency rewards guide weighted learning from successful rollouts, while observation-compatible expert references guide correction of low-reward predictions from failed rollouts. Across three policy families, ILA improves success rates averaged over four real-world tasks by 21.0-36.5 percentage points relative to tactile-conditioned direct-action baselines. Ablations highlight the benefit of encoding contact evolution in action targets beyond tactile conditioning, while the same latent space supports expert-guided offline improvement. Project website: https://mrsecant.github.io/ILA/.