Error-processing research has demonstrated that the brain uses a specialized neural network to detect errors during task performance but the brain regions necessary for conscious awareness of an error are poorly understood. In the present study we show that two well-known error-related event-related potential (ERP) components, the error-related negativity (ERN) and error positivity (Pe) have a differential relationship with awareness during performance of a manual response inhibition task optimized to examine error awareness. While the ERN was unaffected by the participants' conscious experience of errors, the Pe was only seen when participants were aware of committing an error. Source localization of these components indicated that the ERN was generated by a caudal region of the anterior cingulate cortex (ACC) while the Pe was associated with contributions from a more anterior ACC region and the posterior cingulate–precuneus. Tonic EEG measures of cortical arousal were correlated with individual rates of error awareness and showed a specific relationship with the amplitude of the Pe. The latter finding is consistent with evidence that the Pe represents a P3-like facilitation of information processing modulated by subcortical arousal systems. Our data suggest that the ACC might participate in both preconscious and conscious error detection and that cortical arousal provides a necessary setting condition for error awareness. These findings may be particularly important in the context of clinical studies in which a proper understanding of self-monitoring deficits requires an explicit measurement of error awareness.