Imitation ability has consistently been shown to be impaired in individuals with autism. A dysfunctional execution/observation matching system has been proposed to account for this impairment. The EEG mu rhythm is believed to reflect an underlying execution/observation matching system. This study investigated evidence of differential mu rhythm attenuation during the observation, execution, and imitation of movements and examined its relation to behaviorally assessed imitation abilities. Fourteen high-functioning adults with autism spectrum disorder (ASD) and 15 IQ- and age-matched typical adults participated. On the behavioral imitation task, adults with ASD demonstrated significantly poorer performance compared to typical adults in all domains of imitation ability. On the EEG task, both groups demonstrated significant attenuation of the mu rhythm when executing an action. However, when observing movement, the individuals with ASD showed significantly reduced attenuation of the mu wave. Behaviorally assessed imitation skills were correlated with degree of mu wave attenuation during observation of movement. These findings suggest that there is execution/observation matching system dysfunction in individuals with autism and that this matching system is related to degree of impairment in imitation abilities.