Background: The present study was designed to examine the cortical processes that mediate cognitive regulation in response to emotion-eliciting stimuli in anxious children. Methods: Electroencephalographic (EEG) activity was recorded from clinically anxious children ("n" = 29) and typically developing children ("n" = 34). Event-related potential components were recorded while children performed a go/no-go task using facial stimuli depicting angry, calm, and happy expressions. Results: Anxious children had significantly greater posterior P1 and frontal N2 amplitudes, components associated with attention/arousal and cognitive control, respectively, than typically developing children. Anxious children also had significantly greater error-related negativities and correct-response negativities relative to typically developing children. For the anxious group only, there were no differences in neural activation between face (emotion) types or trial (Go vs. No-go) types. A regression analysis revealed that No-go N2 amplitudes for calm faces predicted self-reported anxiety levels. Conclusions: Anxious children appeared to show increased cortical activation regardless of the emotional content of the stimuli. Anxious children also showed greater medial-frontal activity regardless of task demands and response accuracy. Taken together, these findings suggest indiscriminate cortical processes that may underlie the hypervigilant regulatory style seen in clinically anxious individuals. (Contains 4 tables and 5 figures.)