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Stressful life events increase vulnerability to problematic alcohol use, and they may do this by disrupting reward-related neural circuitry. This is particularly relevant for adolescents because alcohol use rises sharply after mid-adolescence and alcohol abuse peaks at age 20. Adolescents also report more stressors compared with children, and neural reward circuitry may be especially vulnerable to stressors during adolescence because of prefrontal cortex remodeling. Using a large sample of male participants in a longitudinal functional magnetic resonance imaging study (N = 157), we evaluated whether cumulative stressful life events between the ages of 15 and 18 were associated with reward-related brain function and problematic alcohol use at age 20 years. Higher cumulative stressful life events during adolescence were associated with decreased response in the medial prefrontal cortex (mPFC) during monetary reward anticipation and following the receipt of monetary rewards. Stress-related decreases in mPFC response during reward anticipation and following rewarding outcomes were associated with the severity of alcohol dependence. Furthermore, mPFC response mediated the association between stressful life events and later symptoms of alcohol dependence. These data are consistent with neurobiological models of addiction that propose that stressors during adolescence increase risk for problematic alcohol use by disrupting reward circuit function.