Effective fear processing relies on the amygdala and medial prefrontal cortex (MPFC). Post-trauma reactions provide a compelling model for examining how the heightened experience of fear impacts these systems. Post-traumatic stress disorder (PTSD) has been associated with excessive amygdala and a lack of MPFC activity in response to nonconscious facial signals of fear, but responses to consciously processed facial fear stimuli have not been examined. We used functional MRI to elucidate the effect of trauma reactions on amygdala-MPFC function during an overt fear perception task. Subjects with PTSD (n = 13) and matched non-traumatized healthy subjects (n = 13) viewed 15 blocks of eight fearful face stimuli alternating pseudorandomly with 15 blocks of neutral faces (stimulus duration 500 ms; ISI 767 ms). We used random effects analyses in SPM2 to examine within- and between-group differences in the MPFC and amygdala search regions of interest. Time series data were used to examine amygdala-MPFC associations and changes across the first (Early) versus second (Late) phases of the experiment. Relative to non-traumatized subjects, PTSD subjects showed a marked bilateral reduction in MPFC activity (in particular, right anterior cingulate cortex, ACC), which showed a different Early-Late pattern to non-traumatized subjects and was more pronounced with greater trauma impact and symptomatology. PTSD subjects also showed a small but significant enhancement in left amygdala activity, most apparent during the Late phase, but reduction in Early right amygdala response. Over the time course, trauma was related to a distinct pattern of ACC and amygdala connections. The findings suggest that major life trauma may disrupt the normal pattern of medial prefrontal and amygdala regulation.