Background: In this study we used event-related potentials (ERPs) and source localization analyses to track the time course of neural activity underlying response monitoring in children diagnosed with an anxiety disorder compared to age-matched low-risk normal controls. Methods: High-density ERPs were examined following errors on a flanker task from 12 children between 8 and 14 years old diagnosed with an anxiety disorder (ANX) and 13 age-matched low-risk normal controls (LRNC). Results: Children diagnosed with an anxiety disorder had increased error-related negativity (ERN) amplitude. The neural generators of the ERN in the ANX group were estimated to be localized in the anterior cingulate cortex (ACC). There were no significant group differences in P[subscript E] amplitude. Conclusions: These data provide evidence for increased ERN amplitude localized to the ACC in children diagnosed with an anxiety disorder, suggesting altered maturational patterns of the ACC circuitry early in the course of this illness.