One of the fundamental axioms of quantum mechanics is associated with the Hermiticity of physical observables. In the case of the Hamiltonian operator, this requirement not only implies real eigenenergies but also guarantees probability conservation. Interestingly, a wide class of non-Hermitian Hamiltonians can still show entirely real spectra. Among these are Hamiltonians respecting parity-time (PT) symmetry. Even though the Hermiticity of quantum observables was never in doubt, such concepts have motivated discussions on several fronts in physics, including quantum field theories, non-Hermitian Anderson models and open quantum systems, to mention a few. Although the impact of PT symmetry in these fields is still debated, it has been recently realized that optics can provide a fertile ground where PT-related notions can be implemented and experimentally investigated. In this letter we report the first observation of the behaviour of a PT optical coupled system that judiciously involves a complex index potential. We observe both spontaneous PT symmetry breaking and power oscillations violating left-right symmetry. Our results may pave the way towards a new class of PT-synthetic materials with intriguing and unexpected properties that rely on non-reciprocal light propagation and tailored transverse energy flow. © 2010 Macmillan Publishers Limited. All rights reserved.