Neurodevelopmental mechanisms are increasingly implicated in bipolar disorder (BD), highlighting the importance of their study in young persons. Neuroimaging studies have demonstrated a central role for frontotemporal corticolimbic brain systems that subserve processing and regulation of emotions, and processing of reward in adults with BD. As adolescence and young adulthood (AYA) is a time when fully syndromal BD often emerges, and when these brain systems undergo dynamic maturational changes, the AYA epoch is implicated as a critical period in the neurodevelopment of BD. Functional magnetic resonance imaging (fMRI) studies can be especially informative in identifying the functional neuroanatomy in adolescents and young adults with BD (BDAYA) and at high risk for BD (HR-BDAYA) that is related to acute mood states and trait vulnerability to the disorder. The identification of early emerging brain differences, trait- and state-based, can contribute to the elucidation of the developmental neuropathophysiology of BD, and to the generation of treatment and prevention targets. In this critical review, fMRI studies of BDAYA and HR-BDAYA are discussed, and a preliminary neurodevelopmental model is presented based on a convergence of literature that suggests early emerging dysfunction in subcortical (e.g., amygdalar, striatal, thalamic) and caudal and ventral cortical regions, especially ventral prefrontal cortex (vPFC) and insula, and connections among them, persisting as trait-related features. More rostral and dorsal cortical alterations, and bilaterality progress later, with lateralization, and direction of functional imaging findings differing by mood state. Altered functioning of these brain regions, and regions they are strongly connected to, are implicated in the range of symptoms seen in BD, such as the insula in interoception, precentral gyrus in motor changes, and prefrontal cortex in cognition. Current limitations, and outlook on the future use of neuroimaging evidence to inform interventions and prevent the onset of mood episodes in BDAYA, are outlined.