The adolescent period is characterized by substantial behavioral changes, including increases in novelty seeking and risk taking, which may facilitate substance use and experimentation. These behavioral changes co-occur with widespread structural and functional neural developments. Ontogenic changes affecting the neural circuitry subserving inhibitory control and reward-related processes are particularly relevant to adolescent risk-taking behavior. Impairment or immaturity of these processes is shown to contribute to enhanced risk for substance abuse. Additionally, the direct neural action of drugs of abuse in adolescents may have more severe consequences than in adults because of the additional potential effects on development. Functional neuroimaging research is beginning to examine the neural correlates of reward and inhibitory processes in adolescents. However, the study of the consequences of exposure to drugs of abuse on brain function in adolescents is lagging. This review summarizes the functional neuroimaging literature that can inform conceptualizations of risk and consequences of substance use in adolescence.