Seeing an action activates neurons in the premotor, motor, and somatosensory cortex. Since a significant fraction of these pyramidal neurons project to the spinal motor circuits, a central question is why we do not automatically perform the actions that we see. Indeed, seeing an action increases both cortical and spinal excitability of consistent motor patterns that correspond to the observed ones. Thus, it is believed that such imitative motor patterns are either suppressed or remain at a sub-threshold level. This would predict, however, that seeing someone make a corrective movement while one is actively involved in the same action should either suppress evoked responses or suppress or modulate the action itself. Here we tested this prediction, and found that seeing someone occasionally stepping over an obstacle while walking on a treadmill did not affect the normal walking pattern at all. However, cutaneously evoked reflexes in the anterior tibial and soleus muscles were modulated as if the subject was stepping over an obstacle. This result thus indicates that spinal activation was not suppressed and was neither at sub-threshold motor resonance. Rather, the spinal modulation from observed stepping reflects an adaptive mechanism for regulating predictive control mechanisms. We conclude that spinal excitability during action observation is not an adverse side-effect of action understanding but reflects adaptive and predictive motor control.