This study attempted to define further the neural processing events underlying social anxiety in patients with social anxiety disorder (SAD) and their response to pharmacotherapy. Social anxiety-related changes in regional cerebral blood flow were defined by [15O]H2 positron emission tomography (PET) in medication-free individuals with generalized SAD (gSAD), and age- and sex-matched comparison subjects, and analyzed using a linear mixed effects model. PET studies were again acquired in the gSAD individuals following an 8-week, flexible dose treatment trial of nefazodone. Both script-guided mental imagery of an anxiogenic social situation and a confrontational mental arithmetic task were associated with marked increases in self-rated anxiety in both subject groups. For gSAD subjects, social anxiety induced by guided mental imagery was associated with increased activity in the left postcentral gyrus and lenticulate, and the right inferior frontal and middle temporal gyri. Social anxiety induced by the mental arithmetic task was associated with activation of the medial and left dorsolateral prefrontal cortex, cerebellum, thalamus, insula, and ventral striatum. Both tasks were associated with relative decreases in activity in the right amygdala and the hippocampus. A direct group comparison indicated that comparison subjects exhibited a differing pattern of social anxiety-related neural activations. Nefazodone treatment was associated with marked clinical improvement. Comparison of social anxiety-related neural activations prior to and after nefazodone administration indicated greater activity in the precentral gyrus, insula, midbrain/hypothalamus, and middle frontal and anterior cingulate gyrus prior to treatment, and greater activity in the left middle occipital and bilateral lingual gyri, postcentral gyrus, gyrus rectus, and hippocampus after treatment. The results of an analysis relating neural activity and treatment-related changes in symptom severity indicated differential neural responses associated with states of symptom remission vs partial response. The observed social anxiety-related changes in distributed neural activity are consistent with cognitive models of SAD and adaptive decreases in amygdala activity in response to social anxiogenics, and support the association of altered frontal cortical responses with treatment response.