This study tested the prediction that the error-related negativity (ERN), a physiological measure of error monitoring, would be enhanced in anxious individuals, particularly in conditions with threatening cues. Participants made gender judgments about faces whose expressions were either happy, angry, or neutral. Replicating prior studies, midline scalp negativities were greater following errors than following correct responses. In addition, state anxiety interacted with facial expression to predict ERN amplitudes. Counter to predictions, participants high in state anxiety displayed smaller ERNs for angry-face blocks and larger ERNs for happy-face blocks, compared to less anxious participants. These results are inconsistent with the simple notion that anxiety enhances error sensitivity globally. Rather, we interpret the findings within an expectancy violation framework, in which anxious participants have altered expectations for success and failure in the context of happy and angry facial cues, with greater ERN amplitudes when expectations are violated.