The theory of mind hypothesis is the basis by which biologically based theories of religion typically explain beliefs in supernatural agents and, in turn, religion. Recent advances in neuroscience suggest that social cognition also involves the mirror neuron system and simulation. This paper summarizes these advances and offers an additional hypothesis regarding the neurological basis for supernatural agents and religion. According to this hybrid hypothesis: religion’s neurobiological basis is (1) the mirror neuron system and simulation based processes, which respond to expressive objects in the natural environment and produce embodied knowledge that imply sentience, and (2) inferential knowledge-based systems, which interpret these intuitions in terms of beliefs in animism and/or supernatural agents. This hypothesis places the mirror neuron system and simulation based processes (i.e. processes conjectured to underlie a direct embodied form of empathy) in an instigating role, and places inferential knowledge-based systems in a secondary, albeit crucial, role. Consequently, this hypothesis is an empathic theory of religion. Moreover, these processes are hypothesized to have selective value insofar as they help small-scale cultures manage their natural resource base more sustainably.