Loneliness is a painful condition associated with increased risk for premature mortality. The formation of new, positive social relationships can alleviate feelings of loneliness, but requires rapid trustworthiness decisions during initial encounters and it is still unclear how loneliness hinders interpersonal trust. Here, a multimodal approach including behavioral, psychophysiological, hormonal, and neuroimaging measurements is used to probe a trust-based mechanism underlying impaired social interactions in loneliness. Pre-stratified healthy individuals with high loneliness scores (n = 42 out of a screened sample of 3678 adults) show reduced oxytocinergic and affective responsiveness to a positive conversation, report less interpersonal trust, and prefer larger social distances compared to controls (n = 40). Moreover, lonely individuals are rated as less trustworthy compared to controls and identified by the blinded confederate better than chance. During initial trust decisions, lonely individuals exhibit attenuated limbic and striatal activation and blunted functional connectivity between the anterior insula and occipitoparietal regions, which correlates with the diminished affective responsiveness to the positive social interaction. This neural response pattern is not mediated by loneliness-associated psychological symptoms. Thus, the results indicate compromised integration of trust-related information as a shared neurobiological component in loneliness, yielding a reciprocally reinforced trust bias in social dyads.