We investigated the effects of cortisol administration (50 mg) on approach and avoidance tendencies in low and high trait avoidant healthy young men. Event-related brain potentials (ERPs) were measured during a reaction time task, in which participants evaluated the emotional expression of photographs of happy and angry faces by making an approaching (flexion) or avoiding (extension) arm movement. The task consisted of an affect-congruent (approach happy faces and avoid angry faces) and an affect-incongruent (reversed instruction) condition. Behavioral and ERP analyses showed that cortisol enhanced congruency effects for angry faces in highly avoidant individuals only. The ERP effects involved an increase of both early (P150) and late (P3) positive amplitudes, indicative of increased processing of the angry faces in high avoidant subjects after cortisol administration. Together, these results suggest a context-specific effect of cortisol on processing of, and adaptive responses to, motivationally significant threat stimuli, particularly in participants highly sensitive to threat signals.