Childhood abuse is associated with later psychopathology, including conduct disorder, antisocial personality disorder, anxiety and depression as well as a heightened risk of health and social problems. However, the neurobiological mechanisms by which childhood adversity increases vulnerability to psychopathology remain poorly understood. There is likely to be a complex interaction between environmental experiences (such as abuse) and individual differences in risk versus protective genes, which influences the neurobiological circuitry underpinning psychological and emotional development. Neuroendocrine studies indicate an association between early adversity and atypical development of the hypothalamic-pituitary-adrenal (HPA) axis stress response, which may predispose to psychiatric vulnerability in adulthood. Brain imaging research in children and adults is providing evidence of several structural and functional brain differences associated with early adversity. Structural differences have been reported in the corpus callosum, cerebellum and prefrontal cortex. Functional differences have been reported in regions implicated in emotional and behavioural regulation, including the amygdala and anterior cingulate cortex. These differences at the neurobiological level may represent adaptations to early experiences of heightened stress that lead to an increased risk of psychopathology. We also consider the clinical implications of future neurobiological and genetic research.