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Introduction: The emergence of anxiety during childhood is accompanied by the development of attentional biases to threat. However, the neural mechanisms underlying these biases are poorly understood. In addition, previous research has not examined whether state and trait anxiety are independently associated with threat-related biases.\ud \ud Methods: We compared ERP waveforms during the processing of emotional faces in a population sample of 58 6–11-year-olds who completed self-reported measures of trait and state anxiety and depression.\ud \ud Results: The results showed that the P1 was larger to angry than neutral faces in the left hemisphere, though early components (P1, N170) were not strongly associated with child anxiety or depression. In contrast, Late Positive Potential (LPP) amplitudes to angry (vs. neutral) faces were significantly and positively associated with symptoms of anxiety/depression. In addition, the difference between LPPs for angry (vs. neutral) faces was independently associated with state and trait anxiety symptoms.\ud \ud Discussion: The results showed that neural responses to facial emotion in children with elevated symptoms of anxiety and depression were most evident at later processing stages characterized as evaluative and effortful. The findings support cognitive models of threat perception in anxiety and indicate that trait elements of anxiety and more transitory fluctuations in anxious affect are important in understanding individual variation in the neural response to threat in late childhood.