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This work is supported by a scholarship from the University of Stirling and a research grant from SINAPSE (Scottish Imaging Network: A Platform for Scientific Excellence). The action observation network has been proposed to play a key role in predicting the action intentions (or goals) of others, thereby facilitating social interaction. Key information when interacting with others is whether someone (an agent) is moving towards or away from us, indicating whether we are likely to interact with the person. In addition, to determine the nature of a social interaction, we also need to take into consideration the distance of the agent relative to us as the observer. How this kind of information is processed within the brain is unknown, at least in part because prior studies have not involved live whole-body motion. Consequently, here we recorded mobile EEG in 18 healthy participants, assessing the neural response to the modulation of direction (walking towards or away) and distance (near vs. far distance) during the observation of an agent walking. We evaluated whether cortical alpha and beta oscillations were modulated differently by direction and distance during action observation. We found that alpha was only modulated by distance, with a stronger decrease of power when the agent was further away from the observer, regardless of direction. Critically, by contrast, beta was found to be modulated by both distance and direction, with a stronger decrease of power when the agent was near and facing the participant (walking towards) compared to when they were near but viewed from the back (walking away). Analysis revealed differences in both the timing and distribution of alpha and beta oscillations. We argue that these data suggest a full understanding of action observation requires a new dynamic neuroscience, investigating actual interactions between real people, in real world environments. Publisher PDF