Recognizing errors and adjusting responses are fundamental to adaptive behavior. The error-related negativity (ERN) and error-related functional MRI (fMRI) activation of the dorsal anterior cingulate cortex (dACC) index these processes and are thought to reflect the same neural mechanism. In the present study, we evaluated this hypothesis. Although errors elicited robust dACC activation using fMRI, combined electroencephalography and magnetoencephalography data localized the ERN to the posterior cingulate cortex (PCC). ERN amplitude correlated with fMRI activation in both the PCC and dACC, and these two regions showed coordinated activity based on functional connectivity MRI. Finally, increased microstructural integrity of the posterior cingulum bundle, as measured by diffusion tensor imaging, predicted faster error correction. These findings suggest that the PCC generates the ERN and communicates with the dACC to subserve error processing. They challenge current models that view fMRI activation of the dACC as the hemodynamic reflection of the ERN.