Developmental research on action processing in the motor cortex relies on a key neural marker – a decrease in 6–12 Hz activity (coined mu suppression). However, recent evidence points towards an increase in mu power, specific for the observation of others’ actions. Complementing the findings on mu suppression, this raises the critical question for the functional role of the mu rhythm in the developing motor system. We here discuss a potential solution to this seeming controversy by suggesting a gating function of the mu rhythm: A decrease in mu power may index the facilitation, while an increase may index the inhibition of motor processes, which are critical during action observation. This account may advance our conception of action understanding in early brain development and points towards critical directions for future research.