With the widespread availability of functional magnetic resonance imaging (fMRI), there has been rapid progress in identifying neural correlates of cognition and emotion in the human brain. In conjunction with basic research studies, fMRI has been increasingly applied in clinical disorders, making it a central research tool in human psychopathology, psychopharmacology, and genetics. In the present article, we discuss a number of conceptual and methodological challenges that confront the implementation of fMRI in clinical and translational research, and we offer a set of recommendations intended to enhance the interpretability and reproducibility of results in clinical fMRI.