Previous studies using transcranial magnetic stimulation (TMS) have shown that during the observation of actions performed by others, the observer's primary motor cortex (M1) becomes facilitated in a highly muscle specific fashion. Here, we used TMS to explore the effect of posture, perspective and body side on muscle specific facilitation of left M1. Subjects viewed video's showing left and right hand extension (palm-down) movements from a first person or third person perspective with their hand posture either congruent (palm-down) or incongruent (palm-up) to the posture of the observed model. Data indicated that facilitation of left M1 was substantially different for observing actions executed with the right (contralateral) or left (ipsilateral) hand. For right hand actions, facilitation of left M1 was shown to be highly specific to the muscle used in the observed action ('intrinsic mapping'). During the observation of left hand stimuli, only half of the subjects displayed this muscle specific facilitation, whereas in the other half, M1 was facilitated according to the observed movement direction ('extrinsic mapping'). Absolute effect magnitude was particularly high when right hand actions were observed from a first person perspective, whereas, for left hand actions, the third person perspective was more efficient. The degree of postural congruency between body parts of the observer and observed model only mildly influenced M1 facilitation. Since action observation is increasingly considered in rehabilitation therapies, the present findings may help identifying the most effective conditions for stimulating the motor system during action observation.