Children’s neural responses to emotions may play a role in the intergenerational transmission of anxiety. In a prospective longitudinal study of a community sample of N = 464 mother–child dyads, we examined relations among maternal anxiety symptoms when children were infants and age 5 years, child neural responses to emotional faces (angry, fearful, happy) at age 3 years, and child internalizing symptoms at age 5 years. Path analyses tested whether amplitudes of event-related potential (ERP) components selected a priori (N290, Nc, P400) (a) mediated associations between maternal anxiety symptoms in infancy and child internalizing symptoms at 5 years and/or (b) moderated associations between maternal anxiety symptoms at 5 years and child internalizing symptoms at 5 years. Mediating effects were not observed for any of the ERP measures. Nc and P400 amplitudes to angry faces and Nc amplitude to happy faces moderated the effect of maternal anxiety at 5 years on child internalizing symptoms at 5 years. Effects were not related to maternal depressive symptoms. Differential sex effects were not observed. The findings suggest that larger neural responses to emotional faces may represent a biological risk factor that amplifies vulnerability to the development of internalizing symptomatology in young children exposed to maternal anxiety.