Identifying biomarkers that characterize developmental trajectories leading to anxiety disorders will likely improve early intervention strategies as well as increase our understanding of the etiopathogenesis of these disorders. The error-related negativity (ERN), an event-related potential that occurs during error commission, is increased in anxious adults and children—and has been shown to predict the onset of anxiety disorders across childhood. The ERN has therefore been suggested as a biomarker of anxiety. However, it remains unclear what specific processes a potentiated ERN may reflect. We have recently proposed that the ERN may reflect trait-like differences in threat sensitivity; however, very few studies have examined the ERN in relation to other indices of this construct. In the current study, the authors measured the ERN, as well as affective modulation of the startle reflex, in a large sample (N = 155) of children. Children characterized by a large ERN also exhibited greater potentiation of the startle response in the context of unpleasant images, but not in the context of neutral or pleasant images. In addition, the ERN, but not startle response, related to child anxiety disorder status. These results suggest a relationship between error-related brain activity and aversive potentiation of the startle reflex during picture viewing—consistent with the notion that both measures may reflect individual differences in threat sensitivity. However, results suggest the ERN may be a superior biomarker of anxiety in children.