Ablative procedures such as anterior capsulotomy are potentially effective in refractory obsessive-compulsive disorder (OCD). Converging evidence suggests the ventral internal capsule white matter tracts traversing the rostral cingulate and ventrolateral prefrontal cortex and thalamus is the optimal target for clinical efficacy across multiple deep brain stimulation targets for OCD. Here we ask which prefrontal regions and underlying cognitive processes might be implicated in the effects of capsulotomy by using both task fMRI and neuropsychological tests assessing OCD-relevant cognitive mechanisms known to map across prefrontal regions connected to the tracts targeted in capsulotomy. We tested OCD patients at least 6 months post-capsulotomy (n = 27), OCD controls (n = 33) and healthy controls (n = 34). We used a modified aversive monetary incentive delay paradigm with negative imagery and a within session extinction trial. Post-capsulotomy OCD subjects showed improved OCD symptoms, disability and quality of life with no differences in mood or anxiety or cognitive task performance on executive, inhibition, memory and learning tasks. Task fMRI revealed post-capsulotomy decreases in the nucleus accumbens during negative anticipation, and in the left rostral cingulate and left inferior frontal cortex during negative feedback. Post-capsulotomy patients showed attenuated accumbens-rostral cingulate functional connectivity. Rostral cingulate activity mediated capsulotomy improvement on obsessions. These regions overlap with optimal white matter tracts observed across multiple stimulation targets for OCD and might provide insights into further optimizing neuromodulation approaches. Our findings also suggest that aversive processing theoretical mechanisms may link ablative, stimulation and psychological interventions.