To characterize the neural correlates of being personally involved in social interaction as opposed to being a passive observer of social interaction between others we performed an fMRI study in which participants were gazed at by virtual characters (ME) or observed them looking at someone else (OTHER). In dynamic animations virtual characters then showed socially relevant facial expressions as they would appear in greeting and approach situations (SOC) or arbitrary facial movements (ARB). Differential neural activity associated with ME>OTHER was located in anterior medial prefrontal cortex in contrast to the precuneus for OTHER>ME. Perception of socially relevant facial expressions (SOC>ARB) led to differentially increased neural activity in ventral medial prefrontal cortex. Perception of arbitrary facial movements (ARB>SOC) differentially activated the middle temporal gyrus. The results, thus, show that activation of medial prefrontal cortex underlies both the perception of social communication indicated by facial expressions and the feeling of personal involvement indicated by eye gaze. Our data also demonstrate that distinct regions of medial prefrontal cortex contribute differentially to social cognition: whereas the ventral medial prefrontal cortex is recruited during the analysis of social content as accessible in interactionally relevant mimic gestures, differential activation of a more dorsal part of medial prefrontal cortex subserves the detection of self-relevance and may thus establish an intersubjective context in which communicative signals are evaluated.