Neuroimaging studies with adults have begun to reveal the neural bases of empathy; however, this research has focused on empathy for physical pain, rather than empathy for negative social experiences. Moreover, this work has not examined adolescents who may frequently witness and empathize with others that experience negative social experiences such as peer rejection. Here, we examined neural activity among early adolescents observing social exclusion compared to observing inclusion, and how this activity related to both trait empathy and subsequent prosocial behavior. Participants were scanned while they observed an individual whom they believed was being socially excluded. At least one day prior to the scan they reported their trait empathy, and following the scan they wrote emails to the excluded victim that were rated for prosocial behavior (e.g., helping, comforting). Observing exclusion compared to inclusion activated regions involved in mentalizing (i.e., dorsomedial prefrontal cortex), particularly among highly empathic individuals. Additionally, individuals who displayed more activity in affective, pain-related regions during observed exclusion compared to inclusion subsequently wrote more prosocial emails to excluded victims. Overall findings suggest that when early adolescents witness social exclusion in their daily lives, some may actually ‘feel the pain’ of the victims and act more prosocially toward them as a result.