Learning by observation is a natural way of acquiring new skills. Previous research suggests that physical and observational training share a similar neural basis. However, it remains poorly understood to what extent observational training affects neural representations of the acquired skill and what factors influence the training effect. Employing a keypress sequence learning paradigm and brain imaging, brain stimulation, and behavioural methods we investigated three parallel questions to help to provide a more comprehensive and integrative perspective on motor skill learning through observation and how it compares to previous findings on learning by doing. In Study 1 (Chapter 2) we investigated whether action observation establishes movement-sequence-specific neural representations that become more distinct with observational practice as reported in a previous physical practice study. In Study 2 (Chapter 3) we investigated whether non-invasive brain stimulation could facilitate observational practice effects, as stated for learning through physical practice. Finally, in Study 3 (Chapter 4) we examined whether individual differences in learning through observation could be explained by the same cognitive abilities and personality characteristics as in learning by physical practice. Overall, across the three studies, we found that same as physical practice, the observational practice provides behavioural benefits on motor skill acquisition. Furthermore, same as physical performance, action observation establishes distinct sequence-specific activity patterns in premotor and parietal brain areas. However, unlike following the physical practice, the sequence-specific activity patterns did not become more specialised following observational practice. Moreover, unlike with physical practice, anodal transcranial direct current stimulation over primary motor cortex during observational practice provided no benefits for motor skill acquisition through observation. Also, it appears that cognitive processes play a different role in learning by observation than in learning by doing. Perhaps although deliberate cognitive processes are involved in observational learning, the limited aspect of hypothesis-testing makes observational learning itself more implicit than explicit in its nature.