BackgroundSocial anxiety disorder (SAD) and major depressive disorder (MDD) are highly comorbid and share impairments in self-referential and social processing. Many naturalistic judgements activate these processes concurrently, which can be referred to as “self-other referential processing”. We sought to examine its neural correlates in young people with SAD and MDD using a novel experimental task. MethodsFifty six young people aged 16 to 25 with diagnoses of SAD and/or MDD (15 with SAD [M = 20.3 years, 60% female], 17 with MDD [M = 19.8 years, 53% female], 24 with comorbid SAD and MDD [M = 19.8 years, 67% female]) and 76 age and gender-matched healthy controls (HCs; M = 20.7 years, 66% female) completed a novel self-other referential processing fMRI task that involved rating how much one related to emotional faces in active conditions and judging how far apart each person’s eyes were in control conditions. ResultsParticipants with SAD had more and those with MDD had less activity in social cognitive areas than HCs when processing social information across all conditions and emotion types. Participants with comorbid SAD-MDD exhibited a distinct pattern of neural activity to patients with single diagnoses. Across the whole sample, the activation of reward system areas (the medial orbitofrontal cortex and caudate) in response to increasing relatedness correlated positively with a dimensional measure of social anxiety. ConclusionsYoung people with SAD, MDD and comorbid SAD-MDD showed deficits in social processing, but they were not specifically related to self-other referential processing. Dimensional social anxiety symptoms were correlated with reward system activation, suggesting that such symptoms are associated with an overestimation of the hedonic value of social stimuli. These novel findings have implications for our understanding of the neural correlates of SAD and MDD, suggesting that alterations in social processing and reward functioning underlie the impairments in self and social processing that characterize both disorders.