Abstract. From early in life, infants watch other people’s actions. How do young infants come to make sense of actions they observe? Here, we review empirical findings on the development of action understanding in infancy. Based on this review, we argue that active action experience is crucial for infants’ developing action understanding. When infants execute actions, they form associations between the motor acts and the sensory consequences of these acts. When infants subsequently observe these actions in others, they can use their motor system to predict the outcome of the ongoing actions. Also, infants come to an understanding of others’ actions through the repeated observation of actions and the effects associated with them. In their daily lives, infants have plenty of opportunities to form associations between observed events and learn about statistical regularities of others’ behaviors. We argue that based on these two forms of experience – active action experience and observational experience – infants gradually develop more complex action understanding capabilities.