When exposed to self-feedback images, individuals can experience negative social emotions (i.e., embarrassment). Our previous study of neurotypical individuals showed that being observed enhanced the extent of the embarrassment provoked by viewing self-face images, and induced a corresponding increase in activity in the right anterior insula (AI). It was recently proposed that the function of the AI to integrate diverse information and produce a subjective experience is impaired in individuals with autism spectrum disorders (ASD). To test this hypothesis, we measured the brain activity when 14 individuals with high-functioning ASD (mean age = 24.5 ± 6.7 years) and 16 neurotypical controls (mean age = 23.4 ± 3.4 years) viewed images of their own faces and those of others, in the presence or absence of an observer. In the control group, being observed significantly increased the extent of the embarrassment provoked by viewing self-face images, and the increase was correlated with an increase in self-related activity (SELF vs. OTHERS) of the right AI. By contrast, the ASD group did not show a significant increase in the extent of embarrassment, and the individual increase was not coupled with individual increase in self-related activity of the right AI. Being observed did not influence the subjective experience of emotion in individuals with ASD owing to atypical integrative processing in the right AI.