Self-generated thoughts unrelated to ongoing activities, also known as "mind-wandering," make up a substantial portion of our daily lives. Reports of such task-unrelated thoughts (TUTs) predict both poor performance on demanding cognitive tasks and blood-oxygen-level-dependent (BOLD) activity in the default mode network (DMN). However, recent findings suggest that TUTs and the DMN can also facilitate metacognitive abilities and related behaviors. To further understand these relationships, we examined the influence of subjective intensity, ruminative quality, and variability of mind-wandering on response inhibition and monitoring, using the Error Awareness Task (EAT). We expected to replicate links between TUT and reduced inhibition, and explored whether variance in TUT would predict improved error monitoring, reflecting a capacity to balance between internal and external cognition. By analyzing BOLD responses to subjective probes and the EAT, we dissociated contributions of the DMN, executive, and salience networks to task performance. While both response inhibition and online TUT ratings modulated BOLD activity in the medial prefrontal cortex (mPFC) of the DMN, the former recruited a more dorsal area implying functional segregation. We further found that individual differences in mean TUTs strongly predicted EAT stop accuracy, while TUT variability specifically predicted levels of error awareness. Interestingly, we also observed co-activation of salience and default mode regions during error awareness, supporting a link between monitoring and TUTs. Altogether our results suggest that although TUT is detrimental to task performance, fluctuations in attention between self-generated and external task-related thought is a characteristic of individuals with greater metacognitive monitoring capacity. Achieving a balance between internally and externally oriented thought may thus aid individuals in optimizing their task performance.