A third of patients receiving Interferon-α (IFN-α) treatment for Hepatitis-C develop major depressive disorder (MDD). Conversely, anti-Tumor Necrosis Factor (TNF) therapies improve depression providing key empirical support for the "inflammatory theory" of depression. Heightened amygdala reactivity (particularly to negatively valanced stimuli) is a consistent finding within MDD; can predict treatment efficacy and reverses following successful treatment. However, whether IFN-α and anti-TNF enhance/attenuate depressive symptoms through modulation of amygdala emotional reactivity is unknown. Utilizing a prospective study design, we recruited 30 patients (mean 48.0 ± 10.5 years, 21 male) initiating IFN-α treatment for Hepatitis-C and 30 (mean 50.4 ± 15.7 years, 10 male) anti-TNF therapy for inflammatory arthritis. All completed an emotional face-processing task during fMRI and blood sampling before and after their first IFN-α (4-h) or anti-TNF (24-h) injection and follow-up psychiatric assessments for 3 months of treatment. IFN-α significantly increased depression symptoms (Hamilton Depression Rating Scale HAM-D) at 4 weeks (p < 0.001) but not 4-h after first dose (p > 0.1). Conversely, anti-TNF significantly improved depressive symptoms (Hospital Anxiety and Depression Rating Scale HADS) at both 24-h (P = 0.015) and 12 weeks (p = 0.018). In support of our a-priori hypothesis, both IFN-α and anti-TNF significantly modulated amygdala reactivity with IFN-α acutely enhancing right amygdala responses to sad (compared with neutral) faces (p = 0.032) and anti-TNF conversely decreasing right amygdala reactivity (across emotional valence) (p = 0.033). Furthermore, these changes predicted IFN-induced increases in HAM-D 4 weeks later (R2 = 0.17, p = 0.022) and anti-TNF-associated decreases in HADS at 24-h (R2 = 0.23, p = 0.01) suggesting that actions of systemic inflammation on amygdala emotional reactivity play a mechanistic role in inflammation-associated depressive symptoms.