The mammalian amygdala expresses various neuropeptides whose signaling has been implicated in emotionality. Many neuropeptides require amidation for full activation by peptidylglycine ␣-amidating monooxygenase (PAM), a transmembrane vesicular cuproenzyme and regulator of the secretory pathway. Mice heterozygous for the Pam gene (PAM ϩ/Ϫ ) exhibit physiological and behavioral abnormalities related to specific peptidergic pathways. In the present study, we evaluated emotionality and examined molecular and cellular responses that characterize neurophysiological differences in the PAM ϩ/Ϫ amygdala. PAM ϩ/Ϫ mice presented with anxiety-like behaviors in the zero maze that were alleviated by diazepam. PAM ϩ/Ϫ animals were deficient in short-and long-term contextual and cued fear conditioning and required higher shock intensities to establish fear-potentiated startle than their wild-type littermates. Immunohistochemical analysis of the amygdala revealed PAM expression in pyramidal neurons and local interneurons that synthesize GABA. We performed whole-cell recordings of pyramidal neurons in the PAM ϩ/Ϫ amygdala to elucidate neurophysiological correlates of the fear behavioral phenotypes. Consistent with these observations, thalamic afferent synapses in the PAM ϩ/Ϫ lateral nucleus were deficient in long-term potentiation. This deficit was apparent in the absence and presence of the GABA A receptor antagonist picrotoxin and was abolished when both GABA A and GABA B receptors were blocked. Both evoked and spontaneous excitatory signals were enhanced in the PAM ϩ/Ϫ lateral nucleus. Phasic GABAergic signaling was also augmented in the PAM ϩ/Ϫ amygdala, and this difference comprised activity-independent and -dependent components. These physiological findings represent perturbations in the PAM ϩ/Ϫ amygdala that may underlie the aberrant emotional responses in the intact animal.