Understanding the neurophysiology of fear extinction has important implications for the treatment of post-traumatic stress disorders. Here we report that fear conditioning resulted in an increase in AMPA/NMDA ratio as well as depression of paired-pulse facilitation (PPF) in neurons of the lateral nucleus of amygdala. These conditioning-induced changes in synaptic transmission were not affected by extinction training. D-cycloserine (DCS), a partial agonist at the glycine-binding site of the NMDA receptor, facilitated extinction and reversed the increase in AMPA/NMDA ratio without altering the depression of PPF when administered before extinction training. Extinction training, however, significantly increased the frequency and amplitude of miniature inhibitory post-synaptic currents and these effects were unaffected by the DCS treatment. Disruption of AMPA receptor endocytosis with a synthetic peptide containing a short C-terminal sequence of GluR2 (869YKEGYNVYG877, GluR23Y) specifically blocked DCS-induced reversal of AMPA/NMDA ratio and the facilitation of extinction. These results suggest that extinction training mainly increases inhibitory transmission leaving conditioning-induced excitatory association unaltered. DCS does not affect inhibitory transmission but reverses the conditioning-induced post-synaptic memory trace when administered before extinction training.