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Description: Punishment of moral norm violators is instrumental for human cooperation. Yet, social and affective neuroscience research has primarily focused on second- and third-party norm enforcement, neglecting the neural architecture underlying observed (vicarious) punishment of moral wrongdoers. We used naturalistic television drama as a sampling space for observing outcomes of morally-relevant behaviors to assess how individuals cognitively process dynamically evolving moral actions and their consequences. Drawing on Affective Disposition Theory, we derive hypotheses linking character morality with viewers’ neural processing of characters’ rewards and punishments. We used functional magnetic resonance imaging (fMRI) to examine neural responses of 28 female participants while free-viewing 15 short story summary video clips of episodes from a popular US television soap opera. Each summary included a complete narrative structure, fully crossing main character behaviors (moral/immoral) and the consequences (reward/punishment) characters faced for their actions. Narrative engagement was examined via intersubject correlation and representational similarity analysis. Highest cortical synchronization in 9 specifically selected regions previously implicated in processing moral information was observed when characters who act immorally are punished for their actions with participants’ empathy as an important moderator. The results advance our understanding of the moral brain and the role of normative considerations and character outcomes in viewers’ engagement with popular narratives.