Empathy for pain engages both shared affective responses and self-other distinction. In this study, we addressed the highly debated question of whether neural responses previously linked to affect sharing could result from the perception of salient affective displays. Moreover, we investigated how the brain network involved in affect sharing and self-other distinction underpinned our response to a pain that is either perceived as genuine or pretended (while in fact both were acted for reasons of experimental control). We found stronger activations in regions associated with affect sharing (anterior insula, aIns, and anterior mid-cingulate cortex, aMCC) as well as with affective self-other distinction (right supramarginal gyrus, rSMG), in participants watching video clips of genuine vs. pretended facial expressions of pain. Using dynamic causal modeling (DCM), we then assessed the neural dynamics between the right aIns and rSMG in these two conditions. This revealed a reduced inhibitory effect on the aIns to rSMG connection for genuine compared to pretended pain. For genuine pain only, brain-to-behavior regression analyses highlighted a linkage between this inhibitory effect on the one hand, and pain ratings as well as empathic traits on the other. These findings imply that if the pain of others is genuine and thus calls for an appropriate empathic response, neural responses in the aIns indeed seem related to affect sharing and self-other distinction is engaged to avoid empathic over-arousal. In contrast, if others merely pretend to be in pain, the perceptual salience of their painful expression results in neural responses that are down-regulated to avoid inappropriate affect sharing and social support.