Paired-pulse transcranial magnetic stimulation (TMS) was used to examine changes in cortical excitability during action observation. We stimulated the left primary motor cortex (M1) of eight healthy volunteers during rest, observation of handwriting and observation of arm movements. Motor evoked potentials (MEP) were recorded from the first dorsal intereosseous (FDI) and biceps (BIC) muscles. Our results showed that action observation induced a facilitation of the MEP amplitude evoked by the single test stimulus and reduced intracortical inhibition and facilitation at 3 ms and 12 ms interstimulus intervals (ISIs), respectively, during paired-pulse stimulation. These changes were specific for the muscle involved in the observed action. Our study presents further evidence that motor excitability is significantly modified when the subject observes an action performed by another individual.