Sensitivity to social evaluation has been proposed as a potential marker or risk factor for depression, and has also been theorized to increase with pubertal maturation. This study utilized an ecologically valid paradigm to test the hypothesis that adolescents with major depressive disorder (MDD) would show altered reactivity to peer rejection and acceptance relative to healthy controls in a network of ventral brain regions implicated in affective processing of social information. A total of 48 adolescents (ages 11-17), including 21 with a current diagnosis of MDD and 27 age- and gender-matched controls, received rigged acceptance and rejection feedback from fictitious peers during a simulated online peer interaction during functional neuroimaging. MDD youth showed increased activation to rejection relative to controls in the bilateral amygdala, subgenual anterior cingulate, left anterior insula and left nucleus accumbens. MDD and healthy youth did not differ in response to acceptance. Youth more advanced in pubertal maturation also showed increased reactivity to rejection in the bilateral amygdala/parahippocampal gyrus and the caudate/subgenual anterior cingulate, and these effects remained significant when controlling for chronological age. Findings suggest that increased reactivity to peer rejection is a normative developmental process associated with pubertal development, but is particularly enhanced among youth with depression.