People can come to falsely remember performing actions that they have not actually performed. Common accounts of such false action memories have invoked source confusion from the overlap of sensory features but largely ignored the role of motor processes. We addressed this lacuna with a paradigm in which participants first perform (vs. do not perform) actions and then observe another person performing some of the non-performed actions. In this paradigm, observation of videos showing another's actions can later induce false self-attributions of these actions, the observation-inflation effect. Contrary to a sensory feature account but consistent with a motor-simulation account, we found the effect even with perceptually impoverished action videos in which the majority of sensory features is absent, but motion cues are preserved (Experiment 1). We then created conditions during action observation that should (vs. should not) impede motor simulation. As predicted we found that the effect of observation was reduced when participants executed movements that were incongruent (vs. congruent) with the observed actions (Experiment 2). We discuss the processes that can produce associations of self with observed others' actions and later affect observers' action memory. (C) 2016 Elsevier B.V. All rights reserved.