Tool use is a characteristic human trait, requiring motor skills that are largely learned by imitation. A neural system that supports imitation and action understanding by directly matching observed actions and their motor counterparts has been found in the human premotor and motor cortices. To test whether this "mirror-neuron system" (MNS) would be activated by observation of tool use, we recorded neuromagnetic oscillatory activity from the primary motor cortex of 10 healthy subjects while they observed the experimenter to use chopsticks in a goal-directed and non-goal-directed manner. The left and right median nerves were stimulated alternatingly, and the poststimulus rebounds of the approximately 20-Hz motor-cortex rhythms were quantified. Compared with the rest condition, the level of the approximately 20-Hz rhythm was suppressed during observation of both types of tool use, indicating activation of the primary motor cortex. The suppression was on average 15-17% stronger during observation of goal-directed than non-goal-directed tool use, and this difference correlated positively with the frequency of subjects' chopstick use during the last year. These results support the view that the motor-cortex activation is related to the observer's ability to understand and imitate motor acts.