In social interaction, age-related differences in emotional processing may lead to varied social decision making between young and older adults. However, previous studies of social decision making have paid less attention to the interactants' emotions, leaving age differences and underlying neural mechanisms unexplored. To address this gap, the present study combined functional and structural magnetic resonance imaging, employing a modified dictator game task with recipients displaying either neutral or sad facial expressions. Behavioral results indicated that although older adults' overall allocations did not differ significantly from those of young adults, older adults' allocations showing a decrease in emotion-related generosity compared to young adults. Using representational similarity analysis, we found that older adults showed reduced neural representations of recipients' emotions and gray matter volume in the right anterior cingulate gyrus (ACC), right insula, and left dorsomedial prefrontal cortex (DMPFC) compared to young adults. More importantly, mediation analyses indicated that age influenced allocations not only through serial mediation of neural representations of the right insula and left DMPFC, but also through serial mediation of the mean gray matter volume of the right ACC and left DMPFC. This study identifies the potential neural pathways through which age affects emotion-related social decision making, advancing our understanding of older adults' social interaction behavior that they may not be less generous unless confronted with individuals with specific emotions.