During reward processing individuals weigh positive and negative features of a stimulus to determine whether they will pursue or avoid it. Though patients with behavioural variant frontotemporal dementia display changes in their pursuit of rewards, such as food, alcohol, money, and sex, the basis for these shifts is not clearly established. In particular, it is unknown whether patients behaviour results from excessive focus on rewards, insensitivity to punishment, or to dysfunction in a particular stage of reward processing, such as anticipation, consumption, or action selection. Our goal was to determine the nature of the reward deficit in behavioural variant frontotemporal dementia and its underlying anatomy. We devised a series of tasks involving pleasant, unpleasant, and neutral olfactory stimuli, designed to separate distinct phases of reward processing. In a group of 25 patients with behavioural variant frontotemporal dementia and 21 control subjects, diagnosis by valence interactions revealed that patients with behavioural variant frontotemporal dementia rated unpleasant odours as less aversive than did controls and displayed lower skin conductance responses when anticipating an upcoming aversive odour. Subjective pleasantness ratings and skin conductance responses did not differ between behavioural variant frontotemporal dementia and controls for pleasant or neutral smells. In a task designed to measure the effort subjects would expend to smell or avoid smelling a stimulus, patients with behavioural variant frontotemporal dementia were less motivated, and therefore less successful than control subjects, at avoiding what they preferred not to smell, but had equivalent success at obtaining stimuli they found rewarding. Voxel-based morphometry of patients with behavioural variant frontotemporal dementia revealed that the inability to subjectively differentiate the valence of pleasant and unpleasant odours correlated with atrophy in right ventral mid-insula and right amygdala. High pleasantness ratings of unpleasant stimuli correlated with left dorsal anterior insula and frontal pole atrophy. These findings indicate that insensitivity to negative information may be a key component of the reward-seeking behaviours in behavioural variant frontotemporal dementia, and may relate to degeneration of structures that are involved in representing the emotional salience of sensory information.