Hypnosis can profoundly alter sensory awareness and cognitive processing. While the cognitive and behavioral phenomena associated with hypnosis have long been thought to relate to attentional processes, the neural mechanisms underlying susceptibility to hypnotic induction and the hypnotic condition are poorly understood. Here, we tested the proposal that highly hypnotizable individuals are particularly adept at focusing attention at baseline, but that their attentional control is compromised following hypnosis due to a decoupling between conflict monitoring and cognitive control processes of the frontal lobe. Employing event-related fMRI and EEG coherence measures, we compared conflict-related neural activity in the anterior cingulate cortex (ACC) and control-related activity in the lateral frontal cortex (LFC) during Stroop task performance between participants of low and high hypnotic susceptibility, at baseline and after hypnotic induction. The fMRI data revealed that conflict-related ACC activity interacted with hypnosis and hypnotic susceptibility, in that highly susceptible participants displayed increased conflict-related neural activity in the hypnosis condition compared to baseline, as well as with respect to subjects with low susceptibility. Cognitive-control-related LFC activity, on the other hand, did not differ between groups and conditions. These data were complemented by a decrease in functional connectivity (EEG gamma band coherence) between frontal midline and left lateral scalp sites in highly susceptible subjects after hypnosis. These results suggest that individual differences in hypnotic susceptibility are linked with the efficiency of the frontal attention system, and that the hypnotized condition is characterized by a functional dissociation of conflict monitoring and cognitive control processes.