A large body of research indicates that psychopathic individuals lie chronically and show little remorse or anxiety. Yet, little is known about the neurobiological substrates of dishonesty in psychopathy. In a sample of incarcerated individuals (n = 67), we tested the hypothesis that psychopathic individuals show reduced activity in the anterior cingulate cortex (ACC) when confronted with an opportunity for dishonest gain, reflecting dishonest behavior that is relatively unhindered by response conflict. During functional magnetic resonance imaging, incarcerated offenders with different levels of psychopathy performed an incentivized prediction task wherein they were given real and repeated opportunities for dishonest gain. We found that while incarcerated offenders showed a high rate of cheating, levels of psychopathic traits did not influence the frequency of dishonesty. Higher psychopathy scores predicted decreased activity in the ACC during dishonest decision-making. Further analysis revealed that the ACC was functionally connected to the dorsolateral prefrontal cortex, and that ACC activity mediated the relationship between psychopathic traits and reduced reaction times for dishonest behavior. These findings suggest that psychopathic individuals behave dishonestly with relatively low levels of response conflict and that the ACC may play a critical role in this pattern of behavior.