Clinical depression commonly emerges in adolescence, which is also a time of developing cognitive ability and related large-scale functional brain networks implicated in depression. In depressed adults, abnormalities in the dynamic functioning of frontoinsular networks, in particular, have been observed and linked to negative rumination. Thus, network dynamics may provide new insight into teen pathophysiology. Here, adolescents (n = 45, ages 13-19) with varying severity of depressive symptoms completed a resting-state functional MRI scan. Functional networks were evaluated using co-activation pattern analysis to identify whole-brain states of spatial co-activation that recurred across participants and time. Measures included: dwell time (proportion of scan spent in that network state), persistence (volume-to-volume maintenance of a network state), and transitions (frequency of moving from state A to state B). Analyses tested associations between depression or trait rumination and dynamics of network states involving frontoinsular and default network systems. Results indicated that adolescents showing increased dwell time in, and persistence of, a frontoinsular-default network state involving insula, dorsolateral and medial prefrontal cortex, and posterior regions of default network, reported more severe symptoms of depression. Further, adolescents who transitioned more frequently between the frontoinsular-default state and a prototypical default network state reported higher depression. Increased dominance and transition frequency of frontoinsular-default network states were also associated with higher rumination, and rumination mediated the associations between network dynamics and depression. Findings support a model in which abnormal frontoinsular dynamics confer vulnerability to maladaptive introspection, which in turn contributes to symptoms of adolescent depression.