Empathy and sympathy play crucial roles in much of human social interaction and are necessary components for healthy coexistence. Sympathy is thought to be a proxy for motivating prosocial behavior and providing the affective and motivational base for moral development. The purpose of the present study was to use functional MRI to characterize developmental changes in brain activation in the neural circuits underpinning empathy and sympathy. Fifty-seven individuals, whose age ranged from 7 to 40 years old, were presented with short animated visual stimuli depicting painful and non-painful situations. These situations involved either a person whose pain was accidentally caused or a person whose pain was intentionally inflicted by another individual to elicit empathic (feeling as the other) or sympathetic (feeling concern for the other) emotions, respectively. Results demonstrate monotonic age-related changes in the amygdala, supplementary motor area, and posterior insula when participants were exposed to painful situations that were accidentally caused. When participants observed painful situations intentionally inflicted by another individual, age-related changes were detected in the dorsolateral prefrontal and ventromedial prefrontal cortex, with a gradual shift in that latter region from its medial to its lateral portion. This pattern of activation reflects a change from a visceral emotional response critical for the analysis of the affective significance of stimuli to a more evaluative function. Further, these data provide evidence for partially distinct neural mechanisms subserving empathy and sympathy, and demonstrate the usefulness of a developmental neurobiological approach to the new emerging area of moral neuroscience.