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The prefrontal cortex (PFC) integrates information from multiple inputs to exert top-down control allowing for appropriate responses in a given context. In psychiatric disorders such as posttraumatic stress disorder, PFC hyperactivity is associated with inappropriate fear in safe situations. We previously reported a form of muscarinic acetylcholine receptor (mAChR)–dependent long-term depression in the PFC that we hypothesize is involved in appropriate fear responding and could serve to reduce cortical hyperactivity following stress. However, it is unknown whether this long-term depression occurs at fear-related inputs. Using optogenetics with extracellular and whole-cell electrophysiology, we assessed the effect of mAChR activation on the synaptic strength of specific PFC inputs. We used selective pharmacological tools to assess the involvement of M 1 mAChRs in conditioned fear extinction in control mice and in the stress-enhanced fear-learning model. M 1 mAChR activation induced long-term depression at inputs from the ventral hippocampus and basolateral amygdala but not from the mediodorsal nucleus of the thalamus. We found that systemic M 1 mAChR antagonism impaired contextual fear extinction. Treatment with an M 1 positive allosteric modulator enhanced contextual fear extinction consolidation in stress-enhanced fear learning–conditioned mice. M 1 mAChRs dynamically modulate synaptic transmission at two PFC inputs whose activity is necessary for fear extinction, and M 1 mAChR function is required for proper contextual fear extinction. Furthermore, an M 1 positive allosteric modulator enhanced the consolidation of fear extinction in the stress-enhanced fear-learning model, suggesting that M 1 positive allosteric modulators may provide a novel treatment strategy to facilitate exposure therapy in the clinic for the treatment of posttraumatic stress disorder. [ABSTRACT FROM AUTHOR]