BackgroundDeficits in threat learning relate to anxiety symptoms. Since several anxiety disorders arise in adolescence, impaired adolescent threat learning could contribute to adolescent changes in risk for anxiety. This study compared threat learning among anxious and non‐anxious youth using self‐reports, peripheral psychophysiology measures, and event‐related potentials. Because exposure therapy, the first‐line treatment for anxiety disorders, is largely based on principles of extinction learning, the study also examined the link between extinction learning and treatment outcomes among anxious youth.MethodsClinically anxious (n = 28) and non‐anxious (n = 33) youth completed differential threat acquisition and immediate extinction. They returned to the lab a week later to complete a threat generalization test and a delayed extinction task. Following these two experimental visits, anxious youth received exposure therapy for 12 weeks.ResultsAnxious as compared to non‐anxious youth demonstrated elevated cognitive and physiological responses across acquisition and immediate extinction learning, as well as greater threat generalization. In addition, anxious youth showed enhanced late positive potential response to the conditioned threat cue compared to the safety cue during delayed extinction. Finally, aberrant neural response during delayed extinction was associated with poorer treatment outcomes.ConclusionsThe study emphasizes differences between anxious and non‐anxious youth in threat learning processes and provides preliminary support for a link between neural processing during delayed extinction and exposure‐based treatment outcome in pediatric anxiety.