When exposed to novel dynamical conditions (e.g., externally imposed forces), neurologically intact subjects easily adjust motor commands on the basis of their own reaching errors. Subjects can also benefit from visual observation of others' kinematic errors. Here, using fMRI, we scanned subjects watching movies depicting another person learning to reach in a novel dynamic environment created by a robotic device. Passive observation of reaching movements (whether or not they were perturbed by the robot) was associated with increased activation in fronto-parietal regions that are normally recruited in active reaching. We found significant clusters in parieto-occipital cortex, intraparietal sulcus, as well as in dorsal premotor cortex. Moreover, it appeared that part of the network that has been shown to be engaged in processing self-generated reach error is also involved in observing reach errors committed by others. Specifically, activity in left intraparietal sulcus and left dorsal premotor cortex, as well as in right cerebellar cortex, was modulated by the amplitude of observed kinematic errors.