Observational learning enables us to make decisions by watching others' behaviors. The quality of such learning depends on the abilities of those we observe, but also on our beliefs about those abilities. We have previously demonstrated that observers learned better from demonstrators described as high vs. low in ability, regardless of their actual performance. The current study aimed to conceptually replicate these findings, and explore the neural mechanisms involved. Forty-five participants performed an observational learning task while undergoing functional magnetic resonance imaging (fMRI). We hypothesized that participants would perform better when demonstrators were described as having high vs. low ability. Unexpectedly, participants performed equally well regardless of described demonstrator ability. The behavioral effects of biased observational learning seem to be driven by mentalizing processes together with general learning and decision-making processes.