BACKGROUND: Youth with anxiety disorders struggle with managing emotions relative to peers, but the neural basis of this difference has not been examined. METHODS: = 13.6; range = 8-17) with (n = 37) and without (n = 24) anxiety disorders completed a cognitive reappraisal task while undergoing functional magnetic resonance imaging. Emotional reactivity and regulation, functional activation, and beta-series connectivity were compared across groups. RESULTS: Groups did not differ on emotional reactivity or regulation. However, fronto-limbic activation after viewing aversive imagery with and without regulation, as well as affect ratings without regulation, were higher for anxious youth. Neither group demonstrated age-related changes in regulation, though anxious youth became less reactive with age. Stronger amygdala-ventromedial prefrontal cortex connectivity related to greater anxiety in control youth, but less anxiety in anxious youth. CONCLUSION: Anxious youth regulated when instructed, but regulation ability did not relate to age. Viewing aversive imagery related to heightened fronto-limbic activation even after reappraisal. Emotion dysregulation in youth anxiety disorders may stem from heightened emotionality and potent bottom-up neurobiological responses to aversive stimuli. Findings suggest the importance of treatments focused on both reducing initial emotional reactivity and bolstering regulatory capacity.