Several neuroimaging studies reported that a common set of regions are recruited during action observation and execution and it has been proposed that the modulation of the μ rhythm, in terms of oscillations in the alpha and beta bands might represent the electrophysiological correlate of the underlying brain mechanisms. However, the specific functional role of these bands within the μ rhythm is still unclear. Here, we used magnetoencephalography (MEG) to analyze the spectral and temporal properties of the alpha and beta bands in healthy subjects during an action observation and execution task. We associated the modulation of the alpha and beta power to a broad action observation network comprising several parieto-frontal areas previously detected in fMRI studies. Of note, we observed a dissociation between alpha and beta bands with a slow-down of beta oscillations compared to alpha during action observation. We hypothesize that this segregation is linked to a different sequence of information processing and we interpret these modulations in terms of internal models (forward and inverse). In fact, these processes showed opposite temporal sequences of occurrence: anterior-posterior during action (both in alpha and beta bands) and roughly posterior-anterior during observation (in the alpha band). The observed differentiation between alpha and beta suggests that these two bands might pursue different functions in the action observation and execution processes.