The experience of aversion is shaped by multiple physiological and psychological factors including one's expectations. Recent work has shown that expectancy manipulation can alter perceptions of aversive events and concomitant brain activation. Accruing evidence indicates a primary role of altered expectancies in the placebo effect. Here, we probed the mechanism by which expectation attenuates sensory taste transmission by examining how brain areas activated by misleading information during an expectancy period modulate insula and amygdala activation to a highly aversive bitter taste. In a rapid event-related fMRI design, we showed that activations in the rostral anterior cingulate cortex (rACC), orbitofrontal cortex (OFC), and dorsolateral prefrontal cortex to a misleading cue that the taste would be mildly aversive predicted decreases in insula and amygdala activation to the highly aversive taste. OFC and rACC activation to the misleading cue were also associated with less aversive ratings of that taste. Additional analyses revealed consistent results demonstrating functional connectivity among the OFC, rACC, and insula. Altering expectancies of upcoming aversive events are shown here to depend on robust functional associations among brain regions implicated in prior work on the placebo effect.