Background: When making decisions, children with oppositional defiant disorder (ODD) are thought to focus on reward and ignore penalty. This is suggested to be associated with a state of low psychophysiological arousal. Methods: This study investigates decision making in 18 children with oppositional defiant disorder and 24 typically developing control subjects. Children were required to choose between three alternatives that carried either frequent small rewards and occasional small penalties (advantageous), frequent large rewards and increasing penalties (seductive), or frequent small rewards and increasing penalties (disadvantageous). Penalties in the seductive and disadvantageous alternatives increased either in frequency or magnitude in two conditions. Heart rate (HR) and skin conductance responses to reinforcement were obtained. Results: In the magnitude condition, children with ODD showed an increased preference for the seductive alternative (carrying large rewards); this was not observed in the frequency condition. Children with ODD, compared with typically developing children, displayed greater HR reactivity to reward (more HR deceleration) and smaller HR reactivity to penalty. Correlation analyses showed that decreased HR responses to penalty were related to an increased preference for large rewards. No group differences were observed in skin conductance responses to reward or penalty. Conclusions: The findings suggest that an increased preference for large rewards in children with ODD is related to a reduced cardiac reactivity to aversive stimuli. This confirms notions of impaired decision making and altered reinforcement sensitivity in children with ODD and adds to the literature linking altered autonomic control to antisocial behavior. © 2010 Society of Biological Psychiatry.