The regulation of affective arousal is a critical aspect of children's social and cognitive development. However, few studies have examined the brain mechanisms involved in the development of this aspect of "hot" executive functioning. This process has been conceptualized as involving prefrontal control of the amygdala. Here, using functional magnetic resonance imaging (fMRI), we investigated the brain mechanisms involved in the development of affective regulation in typically developing 5- to 11-year-olds and an adult comparison sample. Children and adults displayed differing patterns of increased anterior cingulate cortex and decreased amygdala activation during episodes in which emotion regulation was required. Specifically, amygdala activation increased in adults but decreased in children during recovery from a frustrating episode. In addition, we used effective connectivity analyses to investigate differential correlations between key emotional brain areas in response to the regulatory task demands. We found reliable increases in effective connectivity between the anterior cingulate cortex and the amygdala during periods of increased demand for emotion regulation. This effective connectivity increased with age. (Contains 1 table and 4 figures.)