The aim of this study was to examine the relationship of maternal interpersonal violence-related posttraumatic stress disorder (IPV-PTSD), associated neural activity in response to mother-child relational stimuli, and child psychopathology indicators at child ages 12-42 months and one year later. The study tested the hypothesis that decreased maternal neural activity in regions that subserve emotion regulation would be associated with child symptoms associated with emotional dysregulation at both time points. Functional magnetic resonance imaging of 42 mothers with or without violence-exposure and associated IPV-PTSD were assessed. Their child's life-events and symptoms/behaviors indicative of high-risk subsequent PTSD diagnosis on a maternal-report questionnaire were measured one year later. Maternal IPV-PTSD severity was significantly associated with decreased ventromedial prefrontal cortex (vmPFC) activation in response to mother-child relational stimuli. Maternal IPV-PTSD severity and decreased vmPFC activation were then significantly associated with a child attachment disturbance at 12-42 months and symptoms/behaviors one year later, that were correlated with emotional dysregulation and risk for child PTSD. Maternal IPV-PTSD and child exposure to IPV were both predictive of child PTSD symptoms with maternal IPV-PTSD likely mediating the effects of child IPV exposure on child PTSD symptoms. These findings suggest that maternal IPV-PTSD severity and associated decreased vmPFC activity in response to mother-child relational stimuli are predictors of child psychopathology by age 12-42 months and one-year later. Significant findings in this paper may well be useful in understanding how maternal top-down cortico-limbic dysregulation promotes intergenerational transmission of IPV and related psychopathology and, thus should be targeted in treatment.