When learning from direct experience, neurons in the primate brain have been shown to encode a teaching signal used by algorithms in artificial intelligence: the reward prediction error (PE) - the difference between how rewarding an event is, and how rewarding it was expected to be. However, in humans and other species learning often takes place by observing other individuals. Here, we show that, when humans observe other players in a card game, neurons in their rostral anterior cingulate cortex (rACC) encode both the expected value of an observed choice, and the PE after the outcome was revealed. Notably, during the same task neurons recorded in the amygdala (AMY) and the rostromedial prefrontal cortex (rmPFC) do not exhibit this type of encoding. Our results suggest that humans learn by observing others, at least in part through the encoding of observational PEs in single neurons in the rACC.