In this study we used event-related brain potentials (ERP) as neural markers of cognitive operations to examine emotion and attentional processing in a population of high-risk adolescents with mental health problems that included attention deficit and hyperactivity disorder (ADHD), anxiety, and depression. We included a healthy control group for comparison purposes, and employed a modified version of the emotional oddball paradigm, consisting of frequent distracters (scrambled pictures), infrequent distracters (sad, fearful, and neutral pictures), and infrequent targets (circles). Participants were instructed to make a right hand button press to targets and a left hand button press to all other stimuli. EEG/ERP recordings were taken using a high-density 256-channel recording system. Behavioral data showed that for both clinical and non-clinical adolescents, reaction time (RT) was slowest in response to the fearful images. Electrophysiological data differentiated emotion and target processing between clinical and non-clinical adolescents. In the clinical group we observed a larger P100 and late positive potential (LPP) in response to fearful compared to sad or neutral pictures. There were no differences in these ERPs in the healthy sample. Emotional modulation of target processing was also identified in the clinical sample, where we observed an increase in P300 amplitude, and a larger sustained LPP in response to targets that followed emotional pictures (fear and sad) compared to targets that followed neutral pictures or other targets. There were no differences in these target ERPs for the healthy participants. Taken together, we suggest that these data provide important and novel evidence of affective and attention dysfunction in this clinical population of adolescents, and offer an example of the disruptive effects of emotional reactivity on basic cognition.