This study examined the effects of interpersonal similarity on vicarious error processing. We predicted that high similarity between self and other would predict increased neural responsiveness to the other's errors, based on the assumption that experience is more strongly shared when it involves similar others. Participants observed a confederate performing a flanker task while event-related brain potentials were recorded from the observer. Physiological data revealed two error-related potentials, the observational error-related negativity (oERN) and positivity (oPe). Self-reports of perceived similarity toward the confederate predicted both components. Participants reporting higher interpersonal similarity showed a larger oPe response to the other's errors, suggesting increased salience of errors committed by similar others. Unexpectedly, higher similarity also predicted a decreased oERN response. Divergent results for oERN and oPe may reflect the different functional roles of the two components. Together the results demonstrate that vicarious error monitoring is sensitive to social factors.