Reward processing deficits have been implicated in the etiology of depression. A blunted reward positivity (RewP), an event-related potential elicited by feedback to monetary gain relative to loss, predicts new onsets and increases in depression symptoms. Etiological models of depression also highlight stressful life events. However, no studies have examined whether stressful life events moderate the effect of the RewP on subsequent depression symptoms. We examined this question during the key developmental transition from childhood to adolescence. A community sample of 369 children (mean age of 9) completed a self-report measure of depression symptoms. The RewP to winning v. losing was elicited using a monetary reward task. Three years later, we assessed stressful life events occurring in the year prior to the follow-up. Youth depressive symptoms were rated by the children and their parents at baseline and follow-up. Stressful life events moderated the effect of the RewP on depression symptoms at follow-up such that a blunted RewP predicted higher depression symptoms in individuals with higher levels of stressful life events. This effect was also evident when events that were independent of the youth's behavior were examined separately. These results suggest that the RewP reflects a vulnerability for depression that is activated by stress.