Premenstrual dysphoric disorder (PMDD) is a debilitating disorder characterized by severe mood symptoms in the luteal phase of the menstrual cycle. PMDD symptoms are hypothesized to be linked to an altered sensitivity to normal luteal phase levels of allopregnanolone (ALLO), a GABA_A-modulating progesterone metabolite. Moreover, the endogenous 3β-epimer of ALLO, isoallopregnanolone (ISO), has been shown to alleviate PMDD symptoms through its selective and dose-dependent antagonism of the ALLO effect. There is preliminary evidence showing altered recruitment of brain regions during emotion processing in PMDD, but whether this is associated to serum levels of ALLO, ISO or their relative concentration is unknown. In the present study, subjects with PMDD and asymptomatic controls underwent functional magnetic resonance imaging (fMRI) in the mid-follicular and the late-luteal phase of the menstrual cycle. Brain responses to emotional stimuli were investigated and related to serum levels of ovarian steroids, the neurosteroids ALLO, ISO, and their ratio ISO/ALLO. Participants with PMDD exhibited greater activity in brain regions which are part of emotion-processing networks during the late-luteal phase of the menstrual cycle. Furthermore, activity in key regions of emotion processing networks - the parahippocampal gyrus and amygdala - was differentially associated to the ratio of ISO/ALLO levels in PMDD subjects and controls. Specifically, a positive relationship between ISO/ALLO levels and brain activity was found in PMDD subjects, while the opposite was observed in controls. In conclusion, individuals with PMDD show altered emotion-induced brain responses in the late-luteal phase of the menstrual cycle which may be related to an abnormal response to physiological levels of GABA_A-active neurosteroids.