Normal adult aging is associated with difficulties in processing social cues to emotions such as anger and also altered motivation to focus more on positive than negative information. Gaze direction is an important modifier of the social signals conveyed by an emotion, for example, an angry face looking directly at you is considerably more threatening than an angry face looking away. In the present study we tested the hypothesis that older adults would show less neural differentiation to angry faces with direct and avert gaze compared to younger people, with the opposite prediction for happy faces. Healthy older (65–75 years; mean = 69.75) and younger (17–27 years; mean = 20.65) adults completed a functional magnetic resonance imaging experiment in which they were asked to identify happy and angry expressions displayed either with direct or averted gaze. While younger adults showed neural sensitivity to eye-gaze direction during recognition of angry expressions, older adults showed no effect of eye-gaze direction on neural response. In contrast, older adults showed sensitivity to eye-gaze direction during recognition of happy expressions but younger adults did not. Additionally, brain-behavior correlations were conducted to investigate the relationships between emotion recognition and mentalizing brain network in both age groups. Younger (but not older) adults' social cognitive performance was differentially correlated with activation in 2 brain networks when looking at angry faces with direct compared to averted gaze. These novel findings provide evidence for age-related differences in the neural substrates underlying the capacity to integrate facial affect and eye-gaze cues. The results of this study suggest that age-related differences in integrating facial cues may be related to engagement of the mentalizing network, with potentially important implications for social cognitive functioning in late adulthood.