Embodied cognition studies have shown motor resonance during action language processing, indicating that linguistic representations are at least partially multimodal. However, constraints of this activation linked to linguistic and extra-linguistic context, function and timing have not yet been fully explored. Importantly, embodied cognition binds social and physical contexts to cognition, suggesting that more ecologically valid contexts will yield more valid measures of cognitive processing. Herein, we measured cortical motor activation during language processing in a fully immersive Cave automatic virtual environment (CAVE). EEG was recorded while participants engaged in a Go/No-Go task. They heard action verbs and, for Go trials, performed a corresponding action on a virtual object. ERSP (event-related spectral perturbation) was calculated during verb processing, corresponding to the pattern of power suppression (event-related desynchronization – ERD) and enhancement (event-related synchronization – ERS) relative to the reference interval. Significant ERD emerged during verb processing in both the μ (8–13 Hz) and beta band (20–30 Hz) for both Go and No-Go trials. μ ERD emerged in the 400–500 msec time window, associated with lexical-semantic processing. Greater μ ERD emerged for Go compared to No-Go trials. The present results provide compelling evidence in a naturalistic setting of how motor and linguistic processes interact.