Evidence from event-related potential (ERP) studies indicates abnormal error processing and attentional allocation in “trait”-anxious individuals. However, few studies have been conducted that evaluate relevant ERP components during the induction of an anxious state (i.e., fear). In the present study, ERPs were measured in 16 undergraduates during control and fear induction conditions to examine the effects of fear on error processing and attentional allocation. Despite comparable performance in both experimental conditions, the ERP data indicated reductions in attentional allocation and error salience during fear induction. Fear did not appear to directly alter early error processing, as indicated by the error-related negativity, however. The implication of these results for understanding how trait and state anxiety may affect error processing and attentional allocation are discussed.