Since their discovery in the early 1990s, mirror neurons have been proposed to be related to many social-communicative abilities, such as imitation. However, research into the early manifestations of the putative neural mirroring system and its role in early social development is still inconclusive. In the current EEG study, mu suppression, generally thought to reflect activity in neural mirroring systems was investigated in 18- to 30-month-olds during the observation of object manipulations as well as mimicked actions. EEG power data recorded from frontal, central, and parietal electrodes were analysed. As predicted, based on previous research, mu wave suppression was found over central electrodes during action observation and execution. In addition, a similar suppression was found during the observation of intransitive, mimicked hand movements. To a lesser extent, the results also showed mu suppression at parietal electrode sites, over all three conditions. Mu wave suppression during the observation of hand movements and during the execution of actions was significantly correlated with quality of imitation, but not with age or language level.