Background A clinical characteristic of posttraumatic stress disorder (PTSD) is persistently elevated fear responses to stimuli associated with the traumatic event. The objective herein is to determine whether extinction of fear responses is impaired in PTSD and whether such impairment is related to dysfunctional activation of brain regions known to be involved in fear extinction, viz., amygdala, hippocampus, ventromedial prefrontal cortex (vmPFC), and dorsal anterior cingulate cortex (dACC). Methods Sixteen individuals diagnosed with PTSD and 15 trauma-exposed non-PTSD control subjects underwent a 2-day fear conditioning and extinction protocol in a 3-T functional magnetic resonance imaging scanner. Conditioning and extinction training were conducted on day 1. Extinction recall (or extinction memory) test was conducted on day 2 (extinguished conditioned stimuli presented in the absence of shock). Skin conductance response (SCR) was scored throughout the experiment as an index of the conditioned response. Results The SCR data revealed no significant differences between groups during acquisition and extinction of conditioned fear on day 1. On day 2, however, PTSD subjects showed impaired recall of extinction memory. Analysis of functional magnetic resonance imaging data showed greater amygdala activation in the PTSD group during day 1 extinction learning. During extinction recall, lesser activation in hippocampus and vmPFC and greater activation in dACC were observed in the PTSD group. The magnitude of extinction memory across all subjects was correlated with activation of hippocampus and vmPFC during extinction recall testing. Conclusions These findings support the hypothesis that fear extinction is impaired in PTSD. They further suggest that dysfunctional activation in brain structures that mediate fear extinction learning, and especially its recall, underlie this impairment. A clinical characteristic of posttraumatic stress disorder (PTSD) is persistently elevated fear responses to stimuli associated with the traumatic event. The objective herein is to determine whether extinction of fear responses is impaired in PTSD and whether such impairment is related to dysfunctional activation of brain regions known to be involved in fear extinction, viz., amygdala, hippocampus, ventromedial prefrontal cortex (vmPFC), and dorsal anterior cingulate cortex (dACC). Sixteen individuals diagnosed with PTSD and 15 trauma-exposed non-PTSD control subjects underwent a 2-day fear conditioning and extinction protocol in a 3-T functional magnetic resonance imaging scanner. Conditioning and extinction training were conducted on day 1. Extinction recall (or extinction memory) test was conducted on day 2 (extinguished conditioned stimuli presented in the absence of shock). Skin conductance response (SCR) was scored throughout the experiment as an index of the conditioned response. The SCR data revealed no significant differences between groups during acquisition and extinction of conditioned fear on day 1. On day 2, however, PTSD subjects showed impaired recall of extinction memory. Analysis of functional magnetic resonance imaging data showed greater amygdala activation in the PTSD group during day 1 extinction learning. During extinction recall, lesser activation in hippocampus and vmPFC and greater activation in dACC were observed in the PTSD group. The magnitude of extinction memory across all subjects was correlated with activation of hippocampus and vmPFC during extinction recall testing. These findings support the hypothesis that fear extinction is impaired in PTSD. They further suggest that dysfunctional activation in brain structures that mediate fear extinction learning, and especially its recall, underlie this impairment.