Although biases toward signals of fear may be an evolutionary adaptation necessary for survival, heightened biases may be maladaptive and associated with anxiety or depression. In this study, event-related potentials (ERPs) were used to examine the time course of neural responses to facial fear stimuli (versus neutral) presented overtly (for 500 msec with conscious attention) and covertly (for 10 msec with immediate masking to preclude conscious awareness) in 257 nonclinical subjects. We also examined the impact of trait anxiety and depression, assessed using psychometric ratings, on the time course of ERPs. In the total subject group, controlled biases to overtly processed fear were reflected in an enhancement of ERPs associated with structural encoding (120–220 msec) and sustained evaluation persisting from 250 msec and beyond, following a temporo-occipital to frontal topography. By contrast, covert fear processing elicited automatic biases, reflected in an enhancement of ERPs prior to structural encoding (80–180 msec) and again in the period associated with automatic orienting and emotion encoding (230–330 msec), which followed the reverse frontal to temporo-occipital topography. Higher levels of trait anxiety (in the clinical range) were distinguished by a heightened bias to covert fear (speeding of early ERPs), compared to higher depression which was associated with an opposing bias to overt fear (slowing of later ERPs). Anxiety also heightened early responses to covert fear, and depression to overt fear, with subsequent deficits in emotion encoding in each case. These findings are consistent with neural biases to signals of fear which operate automatically and during controlled processing, feasibly supported by parallel networks. Heightened automatic biases in anxiety may contribute to a cycle of hypervigilance and anxious thoughts, whereas depression may represent a “burnt out” emotional state in which evaluation of fear stimuli is prolonged only when conscious attention is allocated.