Fear extinction is a form of inhibitory learning that allows for the adaptive control of conditioned fear responses. Although fear extinction is an active learning process that eventually leads to the formation of a consolidated extinction memory, it is a fragile behavioural state. Fear responses can recover spontaneously or subsequent to environmental influences, such as context changes or stress. Understanding the neuronal substrates of fear extinction is of tremendous clinical relevance, as extinction is the cornerstone of psychological therapy of several anxiety disorders and because the relapse of maladaptative fear and anxiety is a major clinical problem. Recent research has begun to shed light on the molecular and cellular processes underlying fear extinction. In particular, the acquisition, consolidation and expression of extinction memories are thought to be mediated by highly specific neuronal circuits embedded in a large-scale brain network including the amygdala, prefrontal cortex, hippocampus and brain stem. Moreover, recent findings indicate that the neuronal circuitry of extinction is developmentally regulated. Here, we review emerging concepts of the neuronal circuitry of fear extinction, and highlight novel findings suggesting that the fragile phenomenon of extinction can be converted into a permanent erasure of fear memories. Finally, we discuss how research on genetic animal models of impaired extinction can further our understanding of the molecular and genetic bases of human anxiety disorders.