Previous behavioural studies have shown that humans act more altruistically towards kin. Whether and how knowledge of genetic relatedness translates into differential neurocognitive evaluation of observed social interactions has remained an open question. Here, we investigated how the human brain is engaged when viewing a moral dilemma between genetic vs. non-genetic sisters. During functional magnetic resonance imaging, a movie was shown, depicting refusal of organ donation between two sisters, with subjects guided to believe the sisters were related either genetically or by adoption. Although 90% of the subjects self-reported that genetic relationship was not relevant, their brain activity told a different story. Comparing correlations of brain activity across all subject pairs between the two viewing conditions, we found significantly stronger inter-subject correlations in insula, cingulate, medial and lateral prefrontal, superior temporal, and superior parietal cortices, when the subjects believed that the sisters were genetically related. Cognitive functions previously associated with these areas include moral and emotional conflict regulation, decision making, and mentalizing, suggesting more similar engagement of such functions when observing refusal of altruism from a genetic sister. Our results show that mere knowledge of a genetic relationship between interacting persons robustly modulates social cognition of the perceiver.