The mechanisms underlying the development of sustained anxiety are not well understood but it has been suggested that the extended amygdala, which includes the bed nucleus of the stria terminalis (BNST), is involved. Here, fear conditioning and fear generalization (a marker of sustained anxiety) are shown to involve overlapping populations of PKCδ-expressing neurons in the central nucleus of the amygdala. Moreover, increases in activity of these neurons driven by aversive stimuli is regulated by extrasynaptic inhibition of α5 subunit-containing GABA type A receptors by GABAergic projections from the BNST.