Although a large proportion of our lives are spent participating in social interactions, the investigation of the neural mechanisms supporting these interactions has largely been restricted to situations of social observation - that is, situations in which an individual observes a social stimulus without opportunity for interaction. In recent years, efforts have been made to develop a truly social, or 'second-person', neuroscientific approach to these investigations in which neural processes are examined within the context of a real-time reciprocal social interaction. These developments have helped to elucidate the behavioural and neural mechanisms of social interactions; however, further theoretical and methodological innovations are still needed. Findings to date suggest that the neural mechanisms supporting social interaction differ from those involved in social observation and highlight a role of the so-called 'mentalizing network' as important in this distinction. Taking social interaction seriously may also be particularly important for the advancement of the neuroscientific study of different psychiatric conditions.