The reciprocal interaction between pain and negative affect is acknowledged but pain-related alterations in brain circuits involved in this interaction, such as the mediodorsal thalamus (MDThal), still require a better understanding. We sought to investigate the relationship between MDThal circuitry, negative affect and pain severity in chronic musculoskeletal pain. For these analyses, participants with chronic knee pain (CKP, n = 74) and without (n = 36) completed magnetic resonance imaging scans and questionnaires. Seed-based MDThal functional connectivity (FC) was compared between groups. Within CKP group, we assessed the interdependence of MDThal FC with negative affect. Finally, post hoc moderation analysis explored whether burden of pain influences affect-related MDThal FC. The CKP group showed altered MDThal FC to hippocampus, ventromedial prefrontal cortex and subgenual anterior cingulate. Furthermore, in CKP group, MDThal connectivity correlated significantly with negative affect in several brain regions, most notably the medial prefrontal cortex, and this association was stronger with increasing pain burden and absent in pain-free controls. In conclusion, we demonstrate mediodorsal thalamo-cortical dysconnectivity in chronic pain with areas linked to mood disorders and associations of MDThal FC with negative affect. Moreover, burden of pain seems to enhance affect sensitivity of MDThal FC. These findings suggest mediodorsal thalamic network changes as possible drivers of the detrimental interplay between chronic pain and negative affect.