Moving in a co-ordinated fashion with another individual changes our behaviour towards them; we tend to like them more, find them more attractive, and are more willing to co-operate with them. It is generally assumed that this effect on behaviour results from alterations in representations of self and others. Specifically, through neurophysiological perception-action matching mechanisms, interpersonal motor co-ordination (IMC) is believed to forge a neural coupling between actor and observer, which serves to blur boundaries in conceptual self-other representations and causes positive views of the self to be projected onto others. An investigation into this potential neural mechanism is lacking, however. Moreover, the specific components of IMC that might influence this mechanism have not yet been specified. In the present study we exploited a robust behavioural phenomenon - automatic imitation - to assess the degree to which IMC influences neural action observation-execution matching mechanisms. This revealed that automatic imitation is reduced when the actions of another individual are perceived to be synchronised in time, but are spatially incongruent, with our own. We interpret our findings as evidence that IMC does indeed exert an effect on neural perception-action matching mechanisms, but this serves to promote better self-other distinction. Our findings demonstrate that further investigation is required to understand the complex relationship between neural perception-action coupling, conceptual self-other representations, and social behaviour.