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Social phobia (SP) has been associated with amygdala hyperreactivity to fear-relevant stimuli. However, little is known about the neural basis of SP individuals capacity to downregulate their responses to such stimuli and how such regulation varies as a function of comorbid depression and anxiety. We completed an functional magnetic resonance imaging (fMRI) study wherein SP participants without comorbidity (n1⁄430), with comorbid depression (n1⁄418) and with comorbid anxiety (n1⁄419) and healthy controls (n1⁄415) were scanned while completing an affect labeling emotion regulation task. Individuals with SP as a whole exhibited a reversal of the pattern observed in healthy controls in that they showed upregulation of amygdala activity during affect labeling. However, subsequent analyses revealed a more complex picture based on comorbidity type. Although none of the SP subgroups showed the normative pattern of amygdala downregulation, it was those with comorbid depression specifically who showed significant upregulation. Effects could not be attributed to differences in task performance, amygdala reactivity or right ventral lateral prefrontal cortex (RVLPFC) engagement, but may stem from dysfunctional communication between amygdala and RVLPFC. Furthermore, the particularly altered emotion regulation seen in those with comorbid depression could not be fully explained by symptom severity or state anxiety. Results reveal altered emotion regulation in SP, especially when comorbid with depression.