Dehydroepiandrosterone (DHEA) is a neurosteroid with anxiolytic, antidepressant, and antiglucocorticoid properties. It is endogenously released in response to stress, and may reduce negative affect when administered exogenously. Although there have been multiple reports of DHEA's antidepressant and anxiolytic effects, no research to date has examined the neural pathways involved. In particular, brain imaging has not been used to link neurosteroid effects to emotion neurocircuitry. To investigate the brain basis of DHEA's impact on emotion modulation, patients were administered 400 mg of DHEA (N=14) or placebo (N=15) and underwent 3T fMRI while performing the shifted-attention emotion appraisal task (SEAT), a test of emotional processing and regulation. Compared with placebo, DHEA reduced activity in the amygdala and hippocampus, enhanced connectivity between the amygdala and hippocampus, and enhanced activity in the rACC. These activation changes were associated with reduced negative affect. DHEA reduced memory accuracy for emotional stimuli, and also reduced activity in regions associated with conjunctive memory encoding. These results demonstrate that DHEA reduces activity in regions associated with generation of negative emotion and enhances activity in regions linked to regulatory processes. Considering that activity in these regions is altered in mood and anxiety disorders, our results provide initial neuroimaging evidence that DHEA may be useful as a pharmacological intervention for these conditions and invite further investigation into the brain basis of neurosteroid emotion regulatory effects.