Social learning is well established across species. While recent neuroimaging studies show that dorsomedial prefrontal cortex (DMPFC/preSMA) activation correlates with observational learning signals, the precise computations that are implemented by DMPFC/preSMA have remained unclear. To identify whether DMPFC/preSMA supports learning from observed outcomes or observed actions, or possibly encodes even a higher order factor (such as the reliability of the demonstrator), we downregulate DMPFC/preSMA excitability with continuous theta burst stimulation (cTBS) and assess different forms of observational learning. Relative to a vertex-cTBS control condition, DMPFC/preSMA downregulation decreases performance during action-based learning but has no effect on outcome-based learning. Computational modeling reveals that DMPFC/preSMA cTBS disrupts learning the predictability, a proxy of reliability, of the demonstrator and modulates the rate of learning from observed actions. Thus, our results suggest that the DMPFC is causally involved in observational action learning, mainly by adjusting the speed of learning about the predictability of the demonstrator.