To investigate the neural mechanisms underlying the association between poorer working memory performance and higher body mass index (BMI) in children. We employed structural-(sMRI) and functional magnetic resonance imaging (fMRI) with a 2-back working memory task to examine brain abnormalities and their associations with BMI and working memory performance in 232 children with overweight/obesity (OW/OB) and 244 normal weight children (NW) from the Adolescent Brain Cognitive Development dataset. OW/OB had lower working memory accuracy, which was associated with higher BMI. They showed smaller gray matter (GM) volumes in the left superior frontal gyrus (SFG_L), dorsal anterior cingulate cortex, medial orbital frontal cortex, and medial superior frontal gyrus, which were associated with lower working memory accuracy. During the working memory task, OW/OB relative to NW showed weaker activation in the left superior temporal pole, amygdala, insula, and bilateral caudate. In addition, caudate activation mediated the relationship between higher BMI and lower working memory accuracy. Higher BMI is associated with smaller GM volumes and weaker brain activation in regions involved with working memory. Task-related caudate dysfunction may account for lower working memory accuracy in children with higher BMI.