The human mirror neuron system is thought to be the underlying basis of perception-action coupling involved in imitation and action understanding. In order to examine this issue we examined the recruitment of the mirror neuron system, as reflected in mu rhythm suppression in a population of adults with Down syndrome (DS) with known strengths in imitation but with impairments in perceptual-motor coupling. Ten healthy adults and 10 age-matched adults with (DS) participated in the study. Subjects were asked to make self-paced movements (execution), and view movements made by the experimenter (observation). The action consisted of reaching with the dominant hand to grasp and lift a cup. Cortical responses were recorded with a whole head magnetoencephalography (MEG) system. Both groups demonstrated significant attenuation of the mu rhythm in bilateral sensorimotor areas when executing the action. Typical adults also demonstrated significant mu suppression in bilateral sensorimotor areas during observation of the action. In contrast, when observing the movement, adults with DS showed a significantly reduced overall attenuation of mu activity with a distinct laterality in the pattern of mu suppression. These results suggest that there is a dysfunction in the execution/observation matching system in adults with DS and has implications for the functional role of the human mirror neuron system.