Emotion dysregulation (ED) reflects deficits in understanding and managing negative emotions and may serve as a transdiagnostic mechanism of risk for trauma-related psychiatric disorders. Therefore, understanding neurobiological substrates of ED in traumatized individuals is critical. The present study examined associations between ED and baseline structural differences and patterns of functional activity during an emotional task in a sample of African American women (n = 136) recruited from an urban hospital. Participants engaged in a structural magnetic resonance imaging (MRI) session. A subsample (n = 92) also viewed emotional face stimuli during functional MRI. ED was related to greater dorsal anterior cingulate cortex (dACC) surface area (Pcorr < 0.05) and increased dorsomedial prefrontal cortex (dmPFC) and ventromedial PFC activation to fearful stimuli (Pcorr < 0.05), independent of the trauma and psychiatric symptoms. DMPFC activation was also associated with posttraumatic stress disorder and depression symptoms. Mediation analyses showed a significant mediation effect of ED on the relation between dmPFC activation and psychiatric symptoms. These findings are important since dACC and dmPFC play central roles in fear expression and attention to emotional stimuli. Future longitudinal research is needed to help solidify a model of risk for how such neural substrates may be impacted by traumatic experiences to create ED.