Carriers of the short allele of a functional 5' promoter polymorphism of the serotonin transporter gene have increased anxiety-related temperamental traits, increased amygdala reactivity and elevated risk of depression. Here, we used multimodal neuroimaging in a large sample of healthy human subjects to elucidate neural mechanisms underlying this complex genetic association. Morphometrical analyses showed reduced gray matter volume in short-allele carriers in limbic regions critical for processing of negative emotion, particularly perigenual cingulate and amygdala. Functional analysis of those regions during perceptual processing of fearful stimuli demonstrated tight coupling as a feedback circuit implicated in the extinction of negative affect. Short-allele carriers showed relative uncoupling of this circuit. Furthermore, the magnitude of coupling inversely predicted almost 30% of variation in temperamental anxiety. These genotype-related alterations in anatomy and function of an amygdala-cingulate feedback circuit critical for emotion regulation implicate a developmental, systems-level mechanism underlying normal emotional reactivity and genetic susceptibility for depression.