Recent evidence suggests that humans can communicate emotion via chemosensory signals. Olfactory cues signaling anxiety can bias the perception of ambiguous stimuli, but the underlying neurobiological mechanisms of this effect are currently unknown. Here, we investigated the brain responses to subtle changes in facial expressions in response to anxiety chemosensory cues. Ten healthy individuals donated their sweat in two situations: while anticipating an important oral examination (anxiety condition) and during physical exercise (control condition). Subsequently, 24 participants completed a parametrically morphed (neutral to fearful) emotion recognition task under exposure to the olfactory cues of anxiety and sports, in the fMRI scanner. Behaviorally, the participants rated more discernible fearful faces as more fearful and neutral faces as more neutral under exposure to the anxiety cues. For brain response, under exposure to the anxiety cues, increased fearfulness of the face corresponded to increased activity in the left insula and the left middle occipital gyrus extending into fusiform gyrus. Moreover, with higher subjective ratings of facial fearfulness, participants additionally showed increased activity in the left hippocampus. These results suggest that chemosensory anxiety cues facilitate processing of socially relevant fearful stimuli and boost memory retrieval due to enhanced emotional context.