Mu rhythms are EEG oscillations in the 8–13 Hz recorded at sites located roughly over the sensory-motor cortex. There is reliable evidence that the amplitude of mu rhythms is reduced when the participant performs a motor act (mu suppression). Recent studies found mu suppression not only in response to actual movements but also while the participant observes actions executed by someone else. This finding putatively associates the mu suppression to the activity of a mirror neurons system which, in humans, has been suggested to contribute to social skills. In the present study we explored the effects of different levels of social interaction on mu suppression. Participants observed dynamic displays of hand gestures performing actions used in the Rock–Scissors–Paper game. In different blocks, participants passively viewed identical video clips with no game context and in the context of a game, or while being actually engaged in the game either by imagining actions or by actual playing. As a baseline for calculating mu suppression we used a dynamic display of a rolling ball. In addition, to isolate the social aspect of the actual movements, participants performed the same acts outside the game context. Mu suppression was larger while participants were engaged in the social game than when they passively looked at the “opponent” actions or when they performed movements without the game context. This effect was found while viewing the opponent play as well as while actually playing, which supports the view that mu suppression is affected not only by motion, but also by the social context of the motion. However, we did not find differences in mu suppression between perception segments in which the participant did not actually play. Furthermore, in all perception segments occipital alpha suppression was more robust than mu suppression suggesting the involvement of a strong attentional component. While actually playing, however, mu suppression was stronger than alpha suppression.