Background: Little is known about the frontolimbic abnormalities thought to underlie borderline personality disorder (BPD). We endeavoured to study regional responses, as well as their connectivity and habituation during emotion processing. Methods: 14 BPD patients and 14 normal female controls (NC) controlled for menstrual phase underwent emotion-induction during an fMRI task using standardised images in a block design. We then performed psychophysiological interaction (PPI) analysis to investigate functional connectivity. Results: BPD patients reported more disgust in questionnaires compared to controls. Relative to NC, they showed reduced left amygdala and increased dorsolateral prefrontal cortex (dlPFC) activation to all emotions collapsed versus neutral. Habituation of ventral striatal activity to repeated emotional stimuli was observed in controls but not in BPD. Finally, in the context of disgust (but not other emotions) versus neutral, BPD patients displayed enhanced left amygdala coupling with the dlPFC and ventral striatum. Limitations: Strict inclusion criteria reduced the sample size. Conclusions: In summary, BPD showed abnormal patterns of activation, habituation and connectivity in regions linked to emotion regulation. Amygdala deactivation may be mediated by abnormal top-down regulatory control from the dorsolateral prefrontal cortex. Aberrant emotion processing may play a unique role in the pathophysiology of BPD.