Fear of public speaking is common and can cause significant impairment in work and educational functioning. Exposure is an effective treatment for public speaking anxiety but approximately half of participants fail to respond fully and are in need of additional strategies. Functional neuroimaging, psychophysiology, and behavioral data provide evidence that affect labeling (labeling one’s emotional experience) is a promising approach for enhancing emotion regulation, and evidence from spider fearful subjects suggests that combining exposure with affect labeling may enhance long-term fear reduction. The aim of the current project was to build on existing research by examining whether affect labeling enhances the efficacy of exposure in participants with public speaking anxiety. Participants were randomly assigned to exposure with or without affect labeling. Physiological arousal, self-reported fear, and avoidance behavior were assessed before and after exposure and were compared between the two groups. Consistent with hypotheses, participants assigned to the affect labeling group showed greater reduction in physiological activation following exposure than did participants in the Control group. Participants who used more labels during exposure showed greater reductions on physiological measures. Hypotheses were not supported for self-report measures on which participants in the affect labeling group showed less benefit than did participants in the control group. Greater incidental emotion regulation deficits at baseline predicted more benefit from exposure combined with affect labeling than from exposure alone. The current research supports the theory that affect labeling can enhance exposure effectiveness for physiological measures of anxiety. These findings provide further evidence that targeting prefrontal-amygdala circuitry in anxiety patients using tasks that activate key regions involved in emotion regulation can improve treatment effectiveness, and that such interventions will be particularly effective for patients who show the greatest incidental emotion regulation deficits.