Emotion processing is known to interact with memory. Ovarian steroid hormones, such as progesterone and estradiol, modulate emotion processing and memory. However, it is unclear how these hormones influence brain activity when emotion processing is integrated with working memory (WM). Therefore, the objective of this study was to examine the relationship between endogenous hormonal concentration and brain activity during emotion processing in the context of a WM n-back task in 74 young women using functional magnetic resonance imaging (fMRI). Results show that positive emotion processing activates reward-related areas, such as the caudate and putamen, whereas negative emotion processing activates a corticolimbic network, including the amygdala and hippocampus. Furthermore, our findings provide evidence that progesterone modulates more bottom-up brain activation during both positive and negative emotion processing, whereas estradiol activates lateralized, top-down regulation. These findings provide insight on the neural correlates of emotion processing during an n-back task in young women and highlight how important it is to consider women's endogenous hormonal concentration in neurobiological and cognition research.