Individuals with bipolar disorder manifest the full spectrum of emotions ranging from depression to mania. In attempting to understand the functional substrates of mood we attempted to identify brain regions associated with the cognitive generation of affect in bipolar depressed patients. We therefore examined ten depressed female subjects with bipolar affective disorder, and ten age-matched and sex-matched healthy comparison subjects using functional magnetic resonance imaging (fMRI) while viewing alternating blocks of captioned pictures designed to evoke negative, positive or no affective change. The activation paradigm involved the presentation of the same visual materials over three experiments alternating (experiment 1) negative and reference; (experiment 2) positive and reference and (experiment 3) positive and negative captioned pictures. The stimuli produced activation in both patients and comparison subjects in brain regions previously implicated in the generation and modulation of affect, in particular the prefrontal and anterior cingulate cortices. The activation in patients, when compared with healthy subjects, involved additional subcortical regions, in particular the amygdala, thalamus, hypothalamus and medial globus pallidus. Patients and comparison subjects displayed differential sensitivity to affective change with negative (experiment 1) and positive (experiment 2) affect induction producing converse patterns of activation. We conclude that bipolar depressed patients perhaps recruit additional subcortical limbic systems for emotional evaluation and this may reflect state-related or trait-related dysfunction. The differential patterns of activation inform us about bipolar depression and have potential diagnostic and therapeutic significance.