This study employed event-related potentials (ERPs) to investigate the neural correlates of facial affect processing in maltreated and nonmaltreated children at 42 months of age. ERPs elicited while children passively viewed standardized pictures of female models posing angry, happy, and neutral facial expressions were examined, and differences between maltreated (N = 46) and nonmaltreated (N = 25) children were reported. Three occipital components (P1, N170, and P400) and four frontal-central components (N150, P240, Nc, and a positive slow wave [PSW]) were identified. Findings revealed that maltreated children had greater P1 and P400 amplitude in response to angry facial affect compared to other emotions, and compared to nonmaltreated children. N170 amplitude was greater in response to happy compared to angry in the maltreated group. For the P240 component, maltreated children had greater amplitude in response to angry facial expressions relative to happy, whereas children in the nonmaltreated group had greater P240 amplitude in response to happy relative to angry facial affect. Further, the nonmaltreated group had greater PSW amplitude in response to angry facial affect, whereas those in the maltreated group showed greater PSW amplitude to happy facial expressions. The results provided further support for the hypothesis that the experience of maltreatment and the predominantly negative emotional tone in maltreating families alters the functioning of neural systems associated with the identification and processing of facial emotion. These results exemplify the importance of early preventive interventions focused on emotion for children who have experienced maltreatment early in life.