Does own-body information matter during the observation of another person? Using functional MRI, we sought to determine whether incompatibility between observed hand movements and the observer's hand posture leads to differential neural activation compared with compatibility. Twenty participants were asked to observe videos of human hand movements while their hand was placed in a compatible or an incompatible posture. Subsequently, they performed motor imagery of the observed movement. Conjunction analysis of both observation conditions revealed activation in the ventral premotor cortex and the inferior parietal cortex. Observing movements with incompatible hand position elicited higher activation in the left dorsolateral prefrontal cortex and the inferior parietal cortex of both hemispheres. These findings suggest a tight interplay between body representations and action observation.