Humans are exquisitely able to sense the motor intentions and emotions of others. In the last decade, using single cell recordings in monkeys and fMRI in humans, I have contributed to show that (1) mirror neurons and brain regions involved in the execution of a goal directed action also respond to the sound and sight of other people performing a corresponding action and (2) brain regions involved in feeling an emotion also respond when witnessing that emotion in others. Here, I propose to explore two critical questions raised by these findings.1) How does the distributed network of brain regions involved in action observation integrate information across regions? We will use effective connectivity analyses of electrophysiological signals in monkeys (ECoG) and humans (EEG, MEG, ECoG) to explore the direction of information flow between these regions to challenge traditional models of action observation. Results might turn traditional models of (social) perception up-side-down by demonstrating that internal models are the driving force of perception.2) I will leverage an animal model of empathy we recently developed, to finally explore how neurons in brain regions associated with empathy respond during the experience and witnessing of emotions. Through a combination of PET, multi-tetrode recordings and deactivation studies, I will shift the focus of the neuroscience of empathy from fMRI blobs to neurons and their interactions across brain regions. Given the tremendous interest in emotional empathy across many fields, understanding its neural causes will open exciting new horizons for our mechanistic understanding of this fundamental human capacity and the therapy of psychiatric disorders of empathy costing our society hundreds of billions every year.