Social anxiety is characterized by an intense fear of judgment in social situations, yet the underlying mechanisms driving this condition remain poorly understood. One hypothesis holds that specific alterations in Theory of Mind (ToM) affect the ability to interpret others’ thoughts and emotions. Another hypothesis proposes that broader interpretive biases lead individuals to perceive social cues as overly significant, even in neutral settings. We investigated these possibilities by measuring brain activity, pupil responses, and heart rates in socially anxious individuals and matched controls as they viewed ‘Partly Cloudy’, an animated film known to engage the ToM network during specific scenes. While overall brain activity during ToM-related scenes was similar across groups, socially anxious participants exhibited reduced activation in the left posterior superior temporal sulcus (pSTS), a key area for ToM processing. Additionally, intersubject correlation analysis revealed a distinct neural response pattern in the socially anxious group, marked by uniform responses in sensory regions and heightened variability in higher-order cortical areas. This pattern persisted throughout the film and occurred without changes in heart rate or pupil responses, indicating a neural processing bias that manifests even in non-evaluative settings. These findings provide a neural basis for ToM alterations and broader interpretive biases in social anxiety, supporting cognitive-behavioral models and suggesting novel targets for intervention.