The pathophysiology of pediatric bipolar disorder (PBD) impacts both affective and cognitive brain systems. Understanding disturbances in the neural circuits subserving these abilities is critical for characterizing developmental aberrations associated with the disorder and developing improved treatments. Our objective is to use functional neuroimaging with pediatric bipolar disorder patients employing a task that probes the functional integrity of attentional control and affect processing. Ten euthymic unmedicated pediatric bipolar patients and healthy controls matched for age, sex, race, socioeconomic status, and IQ were scanned using functional magnetic resonance imaging. In a pediatric color word matching paradigm, subjects were asked to match the color of a word with one of two colored circles below. Words had a positive, negative or neutral emotional valence, and were presented in 30-s blocks. In the negative affect condition, relative to the neutral condition, patients with bipolar disorder demonstrated greater activation of bilateral pregenual anterior cingulate cortex and left amygdala, and less activation in right rostral ventrolateral prefrontal cortex (PFC) and dorsolateral PFC at the junction of the middle frontal and inferior frontal gyri. In the positive affect condition, there was no reduced activation of PFC or increased amygdala activation. The pattern of reduced activation of ventrolateral PFC and greater amygdala activation in bipolar children in response to negative stimuli suggests both disinhibition of emotional reactivity in the limbic system and reduced function in PFC systems that regulate those responses. Higher cortical cognitive areas such as the dorsolateral PFC may also be adversely affected by exaggerated emotional responsivity to negative emotions. This pattern of functional alteration in affective and cognitive circuitry may contribute to the reduced capacity for affect regulation and behavioral self-control in pediatric bipolar disorder.