Context. Amygdala and ventrolateral prefrontal cortex dysfunction manifests in adolescents with anxiety disorders when they view negatively-valenced stimuli in threatening contexts. Such fear-circuitry dysfunction may also manifest when anticipated social evaluation leads socially anxious adolescents to misperceive peers as threatening. 2. Objective. To determine whether photographs of negatively-evaluated smiling peers, viewed during anticipated evaluation, engage the amygdala and ventrolateral prefrontal cortex differentially in adolescents with and without social anxiety. 3. Design. Case-control study. 4. Setting. Government clinical research institute. 5. Participants. Fourteen adolescents with anxiety disorders associated with marked social concerns and 14 diagnosis-free adolescents, matched on sex, age, IQ, and socio-economic status. 6. Main Outcome Measure(s). Blood oxygenation level-dependent signal measured with event-related functional magnetic resonance imaging. Before and during neuroimaging scans, participants anticipating social evaluation completed peer- and self-appraisals. Event-related analyses were tailored to participants’ ratings of specific peers. 7. Results. Participants classified 40 pictures of same-age peers as ones they wanted to engage or not engage with for a social interaction. Anxious adolescents showed greater amygdala activation than healthy adolescents when anticipating evaluation from peers rated as undesired for an interaction. Viewing undesired peers engaged stronger positive amygdala-ventrolateral-prefrontal-cortex connectivity in anxious vs. healthy adolescents. 8. Conclusions. Anticipating social evaluation from negatively-perceived peers modulates amygdala and ventrolateral prefrontal cortex engagement differentially in anxious and healthy 3 adolescents. Amygdala and ventrolateral prefrontal cortex abnormalities in adolescent anxiety disorders are heightened in specific contexts of potential peer evaluation.