Adults diagnosed with major depressive disorder (MDD) have been found to be characterized by selective attention to negative material and by impairments in their ability to disengage from, or inhibit the processing of, negative stimuli. Altered functioning in the frontal executive control network has been posited to underlie these deficits in cognitive functioning. We know little, however, about the neural underpinnings of inhibitory difficulties in depressed adolescents. We used functional magnetic resonance imaging in 18 adolescents diagnosed with MDD and 15 age- and gender-matched healthy controls (CTLs) while they performed a modified affective Go/No-Go task that was designed to measure inhibitory control in the presence of an emotional distractor. Participants were presented with either a happy or a sad face, followed by a go or a no-go target to which they either made or inhibited a motor response. A group (MDD, CTL) by valence (happy, sad) by condition (go, no-go) analysis of variance indicated that MDD adolescents showed attenuated BOLD response in the right dorsolateral prefrontal cortex (DLPFC) and in the occipital cortex bilaterally, to no-go targets that followed a sad, but not a happy, face. Adolescents diagnosed with MDD showed anomalous recruitment of prefrontal control regions during inhibition trials, suggesting depression-associated disruption in neural underpinnings of the inhibition of emotional distractors. Given that the DLPFC is associated with the maintenance of goal-relevant information, it is likely that sad faces differentially capture attention in adolescents with MDD and interfere with task demands requiring inhibition.