Mu suppression is the attenuation of EEG power in the alpha frequency range (8-12Hz) while executing or observing a motor action. Whereas typically observed at central scalp sites, there are diverging reports about the extent of the attenuation over the cortical mantle, its exact frequency range and the specificity of this phenomenon. We investigated the modulation of EEG oscillations in frequency-bands from 4 to 12Hz at frontal, central, parietal and occipital sites during the execution of manual movements and during observation of similar actions from allocentric (i.e., facing the actor) and egocentric (i.e., seeing the actor from behind) viewpoints. Suppression was determined relative to observation of a non-biological movement. Action observation elicited greater suppression in the lower (8-10Hz) compared to the higher mu range (10-12Hz), and greater suppression in the entire 4-12Hz range at frontal and central sites compared to parietal and occipital sites. In addition, suppression tended to be greater during observation of a motor action from allocentric compared to egocentric viewpoints. During execution of movement, suppression of the EEG occurred primarily in the higher alpha range and was absent at occipital sites. In the theta range (4-8Hz), the EEG amplitude was suppressed during action observation and execution. The results suggest a functional distinction between modulation of mu and alpha rhythms, and between the higher and lower ranges of the mu rhythms. The activity of the presumed human mirror neuron system seems primarily evident in the lower mu range and in the theta range.