Facial expressions convey important social information and can initiate behavioral change through the processing and understanding of emotions. However, while this ability is known to evolve throughout development, it remains unclear whether this ability differs between girls and boys or how other variables such as level of anxiety can modulate it. Furthermore, understanding the underlying neural mechanisms of facial expression processing and how they are linked by sex and anxiety during development is essential, as alterations in this processing have been associated with psychiatric disorders. Herein, 191 typically-developing youth (6-15 years-old) completed an implicit face processing task involving three facial expressions (angry, happy and neutral) during functional magnetic resonance imaging. We conducted linear models on the fMRI data to investigate the impact sex and anxiety on brain responses to emotional faces, accounting for age. Our findings indicated a significant anxiety-by-sex interaction in a posterior network covering bilateral visual and medial temporal cortices during the happy > neutral contrast. Specifically, girls with higher anxiety showed weaker activation while boys showed the opposite pattern. These findings suggest that the inter-subject variability reported in typically developing individuals in response to facial emotions may be related to many factors, including sex and anxiety level.