Studies using transcranial magnetic stimulation have demonstrated that action observation can modulate the activity of the corticospinal system. This has been attributed to the activity of an 'action observation network', whereby premotor cortex activity influences corticospinal excitability. Neuroimaging studies have demonstrated that the context in which participants observe actions (i.e. whether they simply attend to an action, or observe it with the intention to imitate) modulates action observation network activity. The study presented here examined whether the context in which actions were observed revealed similar modulatory effects on corticospinal excitability. Eight human participants observed a baseline stimulus (a fixation cross), observed actions in order to attend to them, or observed the same actions with the intention to imitate them. Whereas motor evoked potentials elicited from the first dorsal interosseus muscle of the hand were facilitated by attending to actions, observing the same actions in an imitative capacity led to no facilitation effect. Furthermore, no motor facilitation effects occurred in a control muscle. Electromyographic data collected when participants physically imitated the observed actions revealed that the activity of the first dorsal interosseus muscle increased significantly during action execution compared with rest. These data suggest that an inhibitory mechanism acts on the corticospinal system to prevent the immediate overt imitation of observed actions. These data provide novel insight into the properties of the human action observation network, demonstrating for the first time that observing actions with the intention to imitate them can modulate the effects of action observation on corticospinal excitability.