While the BDNF Val66Met polymorphism has been linked to various trauma and anxiety - related psychiatric disorders, limited focus has been on the neural structures that might modulate its relationship with objective measures of threat sensitivity. Therefore, we assessed whether there was an interaction of Val66Met polymorphism with brain area volumes previously associated with anxiety and PTSD, such as the ventromedial prefrontal cortex (vmPFC), insular cortex (IC), and dorsal and ventral anterior cingulate cortices (dACC and vACC), in predicting fear-potentiated psychophysiological response in a clinical sample of Veterans. 110 participants engaged in a fear-potentiated acoustic startle paradigm and provided genetic and imaging data. Fear conditions included no, ambiguous, and high threat conditions (shock). Psychophysiological response measures included electromyogram (EMG), skin conductance response (SCR), and heart rate (HR). PTSD status, trauma history, and demographics were also assessed. There was an interaction of Met allele carrier status with vmPFC, IC, dACC, and vACC volumes for predicting SCR (p < 0.001 for all regions). However, only vmPFC and IC significantly moderated the relationship between Val66Met and psychophysiological response (SCR). The Val66met polymorphism may increase susceptibility to PTSD and anxiety disorders via an interaction with reduced vmPFC and IC volume. Future research should examine whether these relationships might be associated with a differential course of illness longitudinally or response to treatments.