During adolescence, concerns about peer rejection and acceptance become increasingly common. Adolescents regularly experience peer rejection firsthand and witness these behaviors among their peers. In the current study, neuroimaging techniques were employed to conduct a preliminary investigation of the affective and cognitive processes involved in witnessing peer acceptance and rejection--specifically when these witnessed events occur in the immediate aftermath of a firsthand experience with rejection. During an fMRI scan, 23 adolescents underwent a simulated experience of firsthand peer rejection. Then, immediately following this experience they watched as another adolescent was ostensibly first accepted and then rejected. Findings indicated that in the immediate aftermath of being rejected by peers, adolescents displayed neural activity consistent with distress when they saw another peer being accepted, and neural activity consistent with emotion regulation and mentalizing (e.g. perspective-taking) processes when they saw another peer being rejected. Furthermore, individuals displaying a heightened sensitivity to firsthand rejection were more likely to show neural activity consistent with distress when observing a peer being accepted. Findings are discussed in terms of how witnessing others being accepted or rejected relates to adolescents' interpretations of both firsthand and observed experiences with peers. In addition, the potential impact that witnessed events might have on the broader perpetuation of bullying at this age is also considered.