The inability to discriminate between threat and safety is a hallmark of stress-induced psychiatric disorders, including post-traumatic stress disorder. Dorsolateral bed nucleus of the stria terminalis (BNST dl ) is critically involved in the modulation of fear and anxiety, and has been proposed to regulate discrimination between signaled (cued, predictable) and unsignaled (unpredictable) threats. We recently showed that oxytocin receptors (OTRs) in the BNST dl facilitate acquisition of cued fear measured in a fear-potentiated startle (FPS). In the current study, using in vivo microdialysis in awake male Sprague–Dawley rats, a double immunofluorescence approach with confocal microscopy, as well as retrograde tracing of hypothalamic BNST-projecting OT neurons, we investigated whether fear conditioning activates OT system and modulates OT release. To determine the role of OTR in fear memory formation, we also infused OTR antagonist or OT into the BNST dl before fear conditioning and measured rats’ ability to discriminate between cued (signaled) and non-cued (unsignaled) fear using FPS. In contrast to acute stress (exposure to forced swim stress or foot shocks alone), cued fear conditioning increases OT content in BNST dl microdialysates. In addition, fear conditioning induces moderate activation of OT neurons in the paraventricular nucleus of the hypothalamus and robust activation in the supraoptic and accessory nuclei of the hypothalamus. Application of OT into the BNST dl facilitates fear learning toward signaled, predictable threats, whereas blocking OTR attenuates this effect. We conclude that OTR neurotransmission in the BNST dl plays a pivotal role in strengthening fear learning of temporally predictable, signaled threats.