Recent functional magnetic resonance imaging studies have reported activation of primary and secondary somatosensory cortices when participants observe another person or object being touched. In this study, we used event-related potentials to examine the nature and time-course of the neural mechanisms associated with the observation of humans and non-human objects being touched. Participants were presented with short video clips of a human arm or a non-human cylindrical object being touched by an object, compared with an object moving in front of the arms or cylinders without touching them. Touch vs non-touch effects were observed in the amplitudes of the N100 and N250 components, as well as a late slow wave component (500–600 ms), measured from electrodes over primary somatosensory cortex. Human vs non-human stimulus effects were reflected in the latencies of the N100, P170 and N250 components recorded over somatosensory cortex, as well as the temporal–parietal visual-perceptual N170 and N250 components. These findings suggest that human and non-human touch observation are associated with somatosensory processing at both an early sensory-perceptual stage and a relatively late cognitive stage, both preceding and following the perceptual encoding of the humanness of stimuli that typically occurs in extrastriate visual areas.