Abstract Viewing a live facial expression typically elicits a similar expression by the observer (facial mimicry) that is associated with a concordant emotional experience (emotional contagion). The model of embodied emotion proposes that emotional contagion and facial mimicry are functionally linked although the neural underpinnings are not known. To address this knowledge gap, we employed a live two-person paradigm (n = 20 dyads) using functional near-infrared spectroscopy during live emotive face-processing while also measuring eye-tracking, facial classifications and ratings of emotion. One dyadic partner, ‘Movie Watcher’, was instructed to emote natural facial expressions while viewing evocative short movie clips. The other dyadic partner, ‘Face Watcher’, viewed the Movie Watcher's face. Task and rest blocks were implemented by timed epochs of clear and opaque glass that separated partners. Dyadic roles were alternated during the experiment. Mean cross-partner correlations of facial expressions (r = 0.36 ± 0.11 s.e.m.) and mean cross-partner affect ratings (r = 0.67 ± 0.04) were consistent with facial mimicry and emotional contagion, respectively. Neural correlates of emotional contagion based on covariates of partner affect ratings included angular and supramarginal gyri, whereas neural correlates of the live facial action units included motor cortex and ventral face-processing areas. Findings suggest distinct neural components for facial mimicry and emotional contagion. This article is part of a discussion meeting issue ‘Face2face: advancing the science of social interaction’.