In the adult human brain, passive observation of actions performed by others activates some of the same cortical areas that are involved in the execution of actions, thereby contributing to action recognition. This mechanism appears to occur through activation of a population of action-coding cells known as mirror neurons (MN). In the adult motor cortex, performing actions and observing human movement reduces the magnitude of the mu (8–13 Hz) rhythm, possibly reflecting MN system activity. Despite the wealth of information available regarding the adult MN system, little is known about its existence in children. Here, we used EEG to probe mu rhythm modulation in 15 children during observation and execution of hand actions. Our data show that mu rhythm attenuation occurs in children under 11 years old during observation of hand movements. Similarly to what has been reported in adults, observation of goal/object-orientated movement produces greater modulation of the mu rhythm than intransitive movement. These data confirm the existence of an observation–execution matching system in the immature human brain and may be of clinical value in the understanding of neurodevelopmental disorders associated with a faulty MN system, such as autism spectrum disorder.