Importance: Among youths with conduct problems, callous-unemotional (CU) traits are known to be an important determinant of symptom severity, prognosis, and treatment responsiveness. But positive correlations between conduct problems and CU traits result in suppressor effects that may mask important neurobiological distinctions among subgroups of children with conduct problems. Objective: To assess the unique neurobiological covariates of CU traits and externalizing behaviors in youths with conduct problems and determine whether neural dysfunction linked to CU traits mediates the link between callousness and proactive aggression. Design, Setting, and Participants: This cross-sectional case-control study involved behavioral testing and neuroimaging that were conducted at a university research institution. Neuroimaging was conducted using a 3-T Siemens magnetic resonance imaging scanner. It included 46 community-recruited male and female juveniles aged 10 to 17 years, including 16 healthy control participants and 30 youths with conduct problems with both low and high levels of CU traits. Main Outcomes and Measures: Blood oxygenation level-dependent signal as measured via functional magnetic resonance imaging during an implicit face-emotion processing task and analyzed using whole-brain and region of interest-based analysis of variance and multiple-regression analyses. Results: Analysis of variance revealed no group differences in the amygdala. By contrast, consistent with the existence of suppressor effects, multiple-regression analysis found amygdala responses to fearful expressions to be negatively associated with CU traits (x = 26, y = 0, z = -12; k = 1) and positively associated with externalizing behavior (x = 24, y = 0, z = -14; k = 8) when both variables were modeled simultaneously. Reduced amygdala responses mediated the relationship between CU traits and proactive aggression. Conclusions and Relevance: The results linked proactive aggression in youths with CU traits to hypoactive amygdala responses to emotional distress cues, consistent with theories that externalizing behaviors, particularly proactive aggression, in youths with these traits stem from deficient empathic responses to distress. Amygdala hypoactivity may represent an intermediate phenotype, offering new insights into effective treatment strategies for conduct problems.