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Realizing universal fault-tolerant quantum computation is a key goal in quantum information science. By encoding quantum information into logical qubits utilizing quantum error correcting codes, physical errors can be detected and corrected, enabling substantial reduction in logical error rates. However, the set of logical operations that can be easily implemented on such encoded qubits is often constrained, necessitating the use of special resource states known as 'magic states' to implement universal, classically hard circuits. A key method to prepare high-fidelity magic states is to perform 'distillation', creating them from multiple lower fidelity inputs. Here we present the experimental realization of magic state distillation with logical qubits on a neutral-atom quantum computer. Our approach makes use of a dynamically reconfigurable architecture to encode and perform quantum operations on many logical qubits in parallel. We demonstrate the distillation of magic states encoded in d=3 and d=5 color codes, observing improvements of the logical fidelity of the output magic states compared to the input logical magic states. These experiments demonstrate a key building block of universal fault-tolerant quantum computation, and represent an important step towards large-scale logical quantum processors.