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In order to identify biomarkers of prodromal mood disorders, we examined functional brain activation in children and adolescent at familial risk for bipolar disorder. Offspring of parents with bipolar I disorder (at-risk youth; N = 115, mean ± SD age: 13.6 ± 2.7; 54 % girls) and group-matched offspring of healthy parents (healthy controls; N = 58, mean ± SD age: 14.2 ± 3.0; 53 % girls) underwent functional magnetic resonance imaging while performing a continuous performance task with emotional and neutral distracters. At baseline, at-risk youth had no history of mood episodes or psychotic disorders. Subjects were followed longitudinally until developing their first mood episode or being lost to follow-up. Standard event-related region-of-interest (ROI) analyses were performed to compare brain activation at baseline between groups and in survival analyses. At baseline, at-risk youth exhibited reduced activation to emotional distracters in the right ventrolateral prefrontal cortex (VLPFC) (p = 0.04). Activation was not significantly altered in additional ROIs, including left VLPFC, bilateral amygdala, caudate, or putamen. In those at-risk youth who developed their first mood episode during follow-up (n = 17), baseline increased activation in right VLPFC, right caudate, and right putamen activation predicted the development of a mood episode. Sample size of converters, loss to follow-up, and number of statistical comparisons. We found preliminary evidence that a reduced activation in right VLPFC might be a marker of risk for or resilience to mood disorders in at-risk youth. Conversely, an increased activation in the right VLPFC, caudate, and putamen might indicate an increased risk for the later development of their first mood episode. • Offspring of parents with bipolar I disorder are at high risk for mood disorders. • We studied risk for mood disorders in bipolar offspring using brain imaging. • We used an attentional task with emotional stimuli to probe brain function. • Bipolar offspring had abnormal functional activation in right prefrontal cortex. • Right prefrontal cortex activation predicted a mood episode in bipolar offspring. [ABSTRACT FROM AUTHOR]