Callous–unemotional (CU) traits characterize a subgroup of youths with conduct problems who exhibit low empathy, fearlessness, and elevated externalizing behaviors. The current study examines the role of aberrant amygdala activity and functional connectivity during a socioemotional judgment task in youths with CU traits, and links these deficits to externalizing behaviors. Functional magnetic resonance imaging was used to compare neural responses in 18 healthy youths and 30 youths with conduct problems and varying levels of CU traits as they evaluated the acceptability of causing another person to experience each of several emotions, including fear. Neuroimaging analyses examined blood oxygenation level dependent responses and task-dependent functional connectivity. High-CU youths exhibited left amygdala hypoactivation relative to healthy controls and low-CU youths primarily during evaluations of causing others fear. CU traits moderated the relationship between externalizing behavior and both amygdala activity and patterns of functional connectivity. The present data suggest that CU youths' aberrant amygdala activity and connectivity affect how they make judgments about the acceptability of causing others emotional distress, and that these aberrations represent risk factors for externalizing behaviors like rule breaking and aggression. These findings suggest that reducing externalizing behaviors in high-CU youths may require interventions that influence affective sensitivity.