During rubber hand illusion (RHI), participants feel that a rubber (fake) hand is their own (i.e., embodiment of the rubber hand) if the unseen real hand and seen rubber hand are stroked synchronously (i.e., visuo-tactile stimuli). The RHI is also evoked if the real and rubber hands are placed in the same position (i.e., visual-proprioceptive congruency), which can be performed using a mirror setting. Using electroencephalography (EEG) and mirror settings, we compared μ rhythm (8–13 Hz) event-related desynchronization (ERD; an index of sensorimotor activation) while watching the movements of embodied or non-embodied rubber hands, which was preceded by an observation of the rubber hand with or without synchronous visuo-tactile stimuli. The illusory ownership of the fake hand was manipulated using visual continuity with (RHI) and without (non-RHI) a fake forearm. Resultantly, an ownership-dependent μ rhythm ERD was found when delivering visuo-tactile stimuli; a greater and more persistent μ rhythm ERD during the rubber hand movement was identified in the RHI in comparison to the non-RHI condition. However, no difference was observed between the two when observing the fake hand alone. These findings suggest the possibility that a self-related multisensory interaction between body representation (top-down processing) and visuo-tactile inputs (bottom-up processing) before a fake hand movement produces ownership-dependent sensorimotor activations during subsequent movement observations.