Empathy involves experiencing emotion vicariously, and understanding the reasons for those emotions. It may be served partly by a motor simulation function, and therefore share a neural basis with imitation (as opposed to mimicry), as both involve sensorimotor representations of intentions based on perceptions of others’ actions. We recently showed a correlation between imitation accuracy and Empathy Quotient (EQ) using a facial imitation task and hypothesised that this relationship would be mediated by the human mirror neuron system. During functional Magnetic Resonance Imaging (fMRI), 20 adults observed novel ‘blends’ of facial emotional expressions. According to instruction, they either imitated (i.e. matched) the expressions or executed alternative, pre-prescribed mismatched actions as control. Outside the scanner we replicated the association between imitation accuracy and EQ. During fMRI, activity was greater during mismatch compared to imitation, particularly in the bilateral insula. Activity during imitation correlated with EQ in somatosensory cortex, intraparietal sulcus and premotor cortex. Imitation accuracy correlated with activity in insula and areas serving motor control. Overlapping voxels for the accuracy and EQ correlations occurred in premotor cortex. We suggest that both empathy and facial imitation rely on formation of action plans (or a simulation of others’ intentions) in the premotor cortex, in connection with representations of emotional expressions based in the somatosensory cortex. In addition, the insula may play a key role in the social regulation of facial expression.