Recent research suggests that the primate orbitofrontal cortex (OFC) is critical for representations of outcomes of actions and their subsequent impact on the control of behavior. In parallel, a recent theory of decision-making called decision affect theory (Mellers, Schwartz, and Ritov, Psychological Science, 1997) emphasizes the role of anticipated affective impact of outcomes in guiding choices, and the effects of comparisons with alternative outcomes (i.e., counterfactual effects). In the context of decision affect theory, we present results from two event-related functional MRI experiments consistent with two hypotheses regarding the role of the human OFC in guiding behavior through outcome representation: (1) counterfactual effects are manifested in the human OFC during expectation of outcomes, such that the anticipated affective impact of outcomes is modulated by the nature of the various possible alternative outcomes; (2) a regional specialization exists in the human prefrontal cortex, such that affective impact of potential negative outcomes of actions is represented mainly by the lateral areas of the OFC, while areas situated progressively more medial and dorsal on the ventral and medial PFC are specifically involved in representing the impact of positively valenced outcomes. We also discuss some of the implications that these hypotheses have for neuroimaging studies of reward processing and decision-making, and for studies of neuropsychiatric disorders in which these processes are thought to be disturbed.