Depression has been associated with task-relevant increased attention toward negative information, reduced attention toward positive information, or reduced inhibition of task-irrelevant negative information. This study employed behavioural and psychophysiological measures (event-related potentials; ERP) to examine whether groups with risk factors for depression (past depression, current dysphoria) would show attentional biases or inhibitory deficits related to viewing facial expressions. In oddball task blocks, young adult participants responded to an infrequently presented target emotion (e.g., sad) and inhibited responses to an infrequently presented distracter emotion (e.g., happy) in the context of frequently presented neutral stimuli. Previous depression was uniquely associated with greater P3 ERP amplitude following sad targets, reflecting a selective attention bias. Also, dysphoric individuals less effectively inhibited responses to sad distracters than non-dysphoric individuals according to behavioural data, but not psychophysiological data. Results suggest that depression risk may be most reliably characterised by increased attention toward others' depressive facial emotion.