Genetic variability in the strength and precision of fear memory is hypothesised to contribute to the etiology of anxiety disorders, including post-traumatic stress disorder. We generated fear-susceptible (F-S) or fear-resistant (F-R) phenotypes from an F8 advanced intercross line (AIL) of C57BL/6J and DBA/2J inbred mice by selective breeding. We identified specific traits underlying individual variability in Pavlovian conditioned fear learning and memory. Offspring of selected lines differed in the acquisition of conditioned fear. Furthermore, F-S mice showed greater cued fear memory and generalised fear in response to a novel context than F-R mice. F-S mice showed greater basal corticosterone levels and hypothalamic corticotrophin-releasing hormone (CRH) mRNA levels than F-R mice, consistent with higher hypothalamic–pituitary–adrenal (HPA) axis drive. Hypothalamic mineralocorticoid receptor and CRH receptor 1 mRNA levels were decreased in F-S mice as compared with F-R mice. Manganese-enhanced magnetic resonance imaging (MEMRI) was used to investigate basal levels of brain activity. MEMRI identified a pattern of increased brain activity in F-S mice that was driven primarily by the hippocampus and amygdala, indicating excessive limbic circuit activity in F-S mice as compared with F-R mice. Thus, selection pressure applied to the AIL population leads to the accumulation of heritable trait-relevant characteristics within each line, whereas non-behaviorally relevant traits remain distributed. Selected lines therefore minimise false-positive associations between behavioral phenotypes and physiology. We demonstrate that intrinsic differences in HPA axis function and limbic excitability contribute to phenotypic differences in the acquisition and consolidation of associative fear memory. Identification of system-wide traits predisposing to variability in fear memory may help in the direction of more targeted and efficacious treatments for fear-related pathology.