Generalized anxiety disorder (GAD) is associated with significant morbidity in children and adolescents, yet only recently have the neuropharmacology and neurophysiology of this condition been studied in youth. Accumulating data suggest structural and functional abnormalities within the brain's fear networks in youth with GAD. Additionally, seven studies examined the efficacy of medications that modulate this system and, in some cases, the direct effects of these medications on structures within these networks (e.g. amygdala, ventrolateral prefrontal cortex [VLPFC]). In this review, we summarize the extant functional, functional connectivity, and structural neuroimaging data in children and adolescents with GAD. In addition, data concerning selective serotonin reuptake inhibitors (SSRIs), selective serotonin norepinephrine reuptake inhibitors (SSNRIs), atypical anxiolytics, benzodiazepines, and psychotherapy are reviewed in the context of the neurophysiology of pediatric GAD. The existing data suggest abnormal activity within the amygdala, VLPFC, and anterior cingulate cortex, as well as the possibility of impaired connectivity among these brain regions. In addition to numerous cognitive behavioral therapy (CBT) trials, five randomized, controlled psychopharmacologic trials primarily in youth with GAD suggest that SSRIs and SSNRIs are effective for this condition. These findings also raise the possibility that functional activity within the amygdala and VLPFC may be altered following successful treatment.