CONTEXT Generalized social phobia (GSP) is characterized by fear/avoidance of social situations. Previous studies have examined the neural responses in GSP to one class of social stimuli, facial expressions. However, studies have not examined the neural response in GSP to another equally important class of social stimuli, the communication of praise or criticism. OBJECTIVE To examine the neural response to receipt of praise or criticism in GSP; specifically, to determine whether patients with GSP show an increased response to the receipt of both praise and criticism and whether self-relevance modulates this relationship. DESIGN Case-control study. SETTING Government clinical research institute. PARTICIPANTS Unmedicated individuals with GSP (n = 17) and age-, IQ-, and sex-matched healthy comparison individuals (n = 17). MAIN OUTCOME MEASURE Blood oxygenation level-dependent signal, as measured via functional magnetic resonance imaging. During functional magnetic resonance imaging scans, individuals read positive (eg, You are beautiful), negative (eg, You are ugly), and neutral (eg, You are human) comments that could be either about the self or about somebody else (eg, He is beautiful). RESULTS Hypothesized significant group x valence x referent interactions were observed within regions of the medial prefrontal cortex and bilateral amygdala. In these regions, the patients with GSP showed significantly increased blood oxygenation level-dependent responses, relative to comparison individuals, to negative comments (criticism) referring to themselves. However, in contrast, there were no significant group differences with respect to negative comments referring to others or neutral or positive comments referring to self or others. CONCLUSIONS These results implicate the medial prefrontal cortex, involved in the representation of the self, together with the amygdala, in the pathophysiology of GSP. Further, findings demonstrate a meaningful effect of psychological context on neural-circuitry hyperactivity in GSP.