Background Children with attention deficit hyperactivity disorder (ADHD) are characterised by developmentally inappropriate levels of hyperactivity, impulsivity and/or inattention and are particularly impaired when performing tasks that require a high level of cognitive control. Methylphenidate (MPH) and motivational incentives may help improve cognitive control by enhancing the ability to monitor response accuracy and regulate performance accordingly. Methods Twenty‐eight children with DSM‐IV ADHD (combined type) aged 9–15 years and pairwise‐matched typically developing children (CTRL) performed a go/no‐go task in which the incentives attached to performance on no‐go trials were manipulated. The ADHD group performed the task off and on their usual dose of MPH. CTRL children performed the task twice but were never medicated. EEG data were recorded simultaneously and two electrophysiological indices of error monitoring, the error‐related negativity (ERN) and error positivity (Pe) were measured. Amplitudes of each ERP were compared between diagnostic groups (CTRL, ADHD), medication days (Off MPH, On MPH) and motivational conditions (baseline – low incentive, reward, response cost). Results Error rates were lower in the reward and response cost conditions compared with baseline across diagnostic groups and medication days. ERN and Pe amplitudes were significantly reduced in ADHD compared with CTRL, and were significantly enhanced by MPH. Incentives significantly increased ERN and Pe amplitudes in the ADHD group but had no effect in CTRL. The effects of incentives did not interact with the effects of MPH on either ERP. Effect sizes were computed and revealed larger effects of MPH than incentives on ERN and Pe amplitudes. Conclusions The findings reveal independent effects of motivational incentives and MPH on two electrophysiological markers of error monitoring in children with ADHD, suggesting that each may be important tools for enhancing or restoring cognitive control in these children.