Autism Spectrum Disorder (ASD) is characterized by difficulties with social motivation and social interaction. However, the neural underpinnings of these processes are poorly understood, and past studies investigating this subject have significant methodological limitations. This study is the first to investigate the neural correlates of social interaction in children and adolescents diagnosed with ASD using a naturalistic “chat” paradigm that mimics real-world reciprocal conversations. Despite core weaknesses in social interaction, participants with ASD showed similar brain activation to their neurotypical counterparts while initiating conversations and receiving replies from peers. Two notable group differences emerged, however. Participants with ASD showed blunted responses in the amygdala while initiating conversations and receiving replies, and they showed hyperactive responses in the temporal parietal junction (TPJ) while initiating conversations with peers. Findings have implications for how we understand social motivational and social cognitive weaknesses in ASD.