BACKGROUND: Functional disturbances in reward-related brain systems are thought to play a role in the development of mood, impulse, and substance abuse disorders. Studies in non-human primates have identified brain regions, including the dorsal / ventral striatum and orbital-frontal cortex (OFC), in which neural activity is modulated by reward. Recent studies in adults have concurred with these findings by observing reward-contingent blood oxygen level dependant (BOLD) responses in these regions during functional magnetic resonance imaging (FMRI) paradigms. However no previous studies indicate whether comparable modulations of neural activity exist in the brain reward systems of children and adolescents. METHODS: We used event-related FMRI and a behavioral paradigm modeled on previous work in adults to study brain responses to monetary gains and losses in non-psychiatric children and adolescents as part of a program examining the neural substrates of anxiety and depression in youth. RESULTS: Regions and time-courses of reward-related activity were similar to those observed in adults with condition-dependent BOLD changes in the ventral striatum, lateral and medial OFC; specifically, these regions showed larger responses to positive than to negative feedback. CONCLUSIONS: These results provide further evidence for the value of event-related FMRI in examining reward systems of the brain, demonstrate the feasibility of this approach in children and adolescents, and establish a baseline from which to understand the pathophysiology of reward-related psychiatric disorders in youth