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Background Neurobiological models of posttraumatic stress disorder (PTSD) implicate fear processing impairments in the maintenance of the disorder. Specific deficits in extinction recall, the retention of learned extinction, have been demonstrated. While deficient extinction recall, and the associated activation pattern of prefrontal and hippocampal regions, distinguishes individuals with PTSD from controls, research has not yet examined changes following treatment. We examined the behavioral and neural correlates of extinction recall before and after cognitive behavioral treatment of PTSD. Methods Fifty-eight participants (30 with PTSD, 28 trauma-exposed matched controls) underwent a 2-day behavioral fear conditioning, extinction, and recall paradigm during functional magnetic resonance imaging (fMRI). The same procedures were repeated 10 weeks later, after PTSD patients had completed prolonged exposure treatment. We analyzed fMRI data from 32 subjects (16 PTSD; 16 controls) and skin conductance response (SCR) data from 33 subjects (16 PTSD; 17 controls). Neural activity during extinction recall, SCR, and PTSD symptoms were compared across groups and over time. Results PTSD patients exhibited pre- to post-treatment reduction in rostral anterior cingulate cortex (rACC) activation during extinction recall, and increase in functional coherence between the rACC and the ventromedial prefrontal cortex (vmPFC) and subgenual anterior cingulate cortex (sgACC). Reduced PTSD symptom severity from pre- to post-treatment was significantly associated with reduced subgenual ACC and parahippocampal activation during this task. SCR during the extinction recall phase did not significantly change with treatment in the PTSD group, but change in SCR was associated with reduction in PTSD symptom severity. Conclusions Prolonged exposure treatment appears to alter neural activation in PTSD patients during recall of fear extinction, and change in extinction recall (measured by SCR) is associated with symptom reduction. We discuss results in the context of neural systems involved in response to affective stimuli., Highlights • Deficient recall of extinguished fear (extinction recall; ER) has been associated with PTSD. • Prolonged exposure (PE) is a first line treatment for PTSD which relies on extinction. • Changes in prefrontal activation and functional connectivity during ER appeared following PE. • Changes in ER following PE corresponded to changes in PTSD severity. • Taken together, these findings suggest normalization of ER deficits in PTSD following PE.