Dysfunction in an execution/observation matching system, or mirror neuron system, has been proposed to contribute to the social deficits observed in Autism Spectrum Disorder (ASD). Atypical activity in this system, as reflected in attenuation of the EEG mu rhythm, has been demonstrated in several studies; however, normative patterns of activity have been evident in other ASD samples. The current study sought to investigate this poorly understood heterogeneity in social perceptual brain function in ASD. EEG mu rhythm was recorded in a well-characterized sample of 19 children with ASD (mean age = 6.4; 1 female) and 19 age-matched typically developing peers (mean age = 6.9; 2 females) during execution and observation of goal-directed hand actions. Children were assessed on variables theoretically related to mirror neuron system function (MNS), such as ASD symptoms and imitation ability. Results indicated that MNS activity was associated with facial imitation ability, but not hand imitation ability, in children with ASD and typically developing individuals. Groups were comparable in terms of average MNS activity during both action observation and execution, but, in both groups, a subset of children showed absent or significantly reduced MNS activity during observation of action in conjunction with greater difficulty in imitation. These results emphasize the relationship between EEG indices of MNS function and imitative skill and suggest that dysfunction of the MNS is related to imitation ability in both clinical and typical populations, rather than representing a core deficit or universal impairment in ASD. (Contains 1 table and 3 figures.)