Posttraumatic stress disorder (PTSD) is a psychiatric illness whose prevalence in women is more than twice the rate as men. Despite a burgeoning literature characterizing sex differences in PTSD incidence and its disproportionate burden on society, there is a dearth of literature describing biological mechanisms underlying these disparities. However, the recent identification of biomarkers of PTSD by translational neuroscientists offers a promising opportunity to explore sex interactions in PTSD phenotypes. A notable observation is that individuals with PTSD show deficits in their ability to inhibit conditioned fear responding after extinction training. Given that extinction procedures, via exposure-based cognitive behavioral therapy, make up one of the predominant modes of treatment in PTSD, there is a critical need for more research on sex interactions in this form of fear regulation. An emerging hypothesis is that fluctuating gonadal hormones, especially estrogen, in the menstrual cycle may play a critical role in fear extinction and, hence, PTSD vulnerability and symptom severity in women. The current review discusses how the study of putative activational effects of estrogen on fear extinction may be harnessed to advance the search for better treatments for PTSD in women. We conclude that estrogen treatment may be a putative pharmacological adjunct in extinction based therapies, and should be tracked in the menstrual cycle during the course of PTSD treatment.