This review discusses neurobiological studies of oppositional defiant disorder and conduct disorder within the conceptual framework of three interrelated mental domains: punishment processing, reward processing, and cognitive control. First, impaired fear conditioning, reduced cortisol reactivity to stress, amygdala hyporeactivity to negative stimuli, and altered serotonin and noradrenaline neurotransmission suggest low punishment sensitivity, which may compromise the ability of children and adolescents to make associations between inappropriate behaviors and forthcoming punishments. Second, sympathetic nervous system hyporeactivity to incentives, low basal heart rate associated with sensation seeking, orbitofrontal cortex hyporeactiviy to reward, and altered dopamine functioning suggest a hyposensitivity to reward. The associated unpleasant emotional state may make children and adolescents prone to sensation-seeking behavior such as rule breaking, delinquency, and substance abuse. Third, impairments in executive functions, especially when motivational factors are involved, as well as structural deficits and impaired functioning of the paralimbic system encompassing the orbitofrontal and cingulate cortex, suggest impaired cognitive control over emotional behavior. In the discussion we argue that more insight into the neurobiology of oppositional defiance disorder and conduct disorder may be obtained by studying these disorders separately and by paying attention to the heterogeneity of symptoms within each disorder.