Pain catastrophising is an exaggerated cognitive attitude implemented during pain or when thinking about pain. Catastrophising was previously associated with increased pain severity, emotional distress and disability in chronic pain patients, and is also a contributing factor in the development of neuropathic pain. To investigate the neural basis of how pain catastrophising affects pain observed in others, we acquired EEG data in groups of participants with high (High-Cat) or low (Low-Cat) pain catastrophising scores during viewing of pain scenes and graphically matched pictures not depicting imminent pain. The High-Cat group attributed greater pain to both pain and non-pain pictures. Source dipole analysis of event-related potentials during picture viewing revealed activations in the left (PHGL) and right (PHGR) paraphippocampal gyri, rostral anterior (rACC) and posterior cingulate (PCC) cortices. The late source activity (600-1100 ms) in PHGL and PCC was augmented in High-Cat, relative to Low-Cat, participants. Conversely, greater source activity was observed in the Low-Cat group during the mid-latency window (280-450 ms) in the rACC and PCC. Low-Cat subjects demonstrated a significantly stronger correlation between source activity in PCC and pain and arousal ratings in the long latency window, relative to high pain catastrophisers. Results suggest augmented activation of limbic cortex and higher order pain processing cortical regions during the late processing period in high pain catastrophisers viewing both types of pictures. This pattern of cortical activations is consistent with the distorted and magnified cognitive appraisal of pain threats in high pain catastrophisers. In contrast, high pain catastrophising individuals exhibit a diminished response during the mid-latency period when attentional and top-down resources are ascribed to observed pain.