Background: Although a large number of functional magnetic resonance imaging (fMRI) studies have investigated the neural bases of empathy, little is known about its spatiotemporal dynamics or its modulation by the level of friendship between the observer and the agent who is being hurt. Moreover, most of the previous studies on empathy have focused on empathy for pain rather than empathy for positive emotions, such as happiness. In the present study, we addressed this question by investigating the spatiotemporal brain dynamics of two different kinds of empathy (empathy for pain, empathy for happiness) with a behavioral priming empathy task involving two different level of primes (a close friend, a stranger).Method/Principal Findings: Electrical brain activity and behavioral data were analyzed from 30 subjects (12 males and 18 females). Half of the subjects performed a behavioral task on empathy for pain task (EPT), while the other half performed a behavioral task on empathy for happiness task (EHT). In each task, participants viewed prime photographs of either: (1) a stranger; or (2) a close friend (primes) followed by target photographs showing either a hand being hurt (or not; targets in the EPT), or a hand in happy circumstances (or not; targets in the EHT). In each task, participants were asked to judge the target situation and report whether they could feel the pain (in EPT) or the happiness (in the EHT), as a function of the primes i.e., either from the close friend’s or from the stranger’s perspective. Although our behavioral results didn’t reveal any explicit differences among the different types of primes within each task, our electrophysiological results showed variations as a function of the primes. First, a early smaller N110 amplitude for pain was observed in the anterior prefrontal cortex during the friend prime condition compared to the stranger prime condition. No similar early effects were found for happiness. On the other hand, both empathy for happiness (EHT) and empathy for pain (EPT) elicited later differences. In the EPT, the friend prime elicited a larger late positive potential (LPP) than the stranger prime. In the EHT, the friend prime elicited a larger N250, a smaller P300, and a smaller LPP than the stranger prime.Conclusions: Taking the perspective of a close friend (as a prime stimulus) does have a dual-stage effect on empathy that is characterized by an early modulation for pain and later modulations for both pain and happiness. The early differences between friend and stranger primes for pain (but not for happiness) suggest that empathy for pain is an automatic process that has been socially learned and passed among friends. On the other hand, the later differences observed between stranger and friend prime suggest that additional cognitive appraisal take place for both pain and happiness. Our results suggest that it takes more cognitive attentional efforts to judge a stranger’s happiness than a friend’s happiness, whereas the opposite is true for pain. These findings open new avenues toward a better understanding of the empathic mind.