Physical proximity to a traumatic event increases the severity of accompanying stress symptoms, an effect that is reminiscent of evolutionarily configured fear responses based on threat imminence. Despite being widely adopted as a model system for stress and anxiety disorders, fear-conditioning research has not yet characterized how threat proximity impacts the mechanisms of fear acquisition and extinction in the human brain. We used three-dimensional (3D) virtual reality technology to manipulate the egocentric distance of conspecific threats while healthy adult participants navigated virtual worlds during functional magnetic resonance imaging (fMRI). Consistent with theoretical predictions, proximal threats enhanced fear acquisition by shifting conditioned learning from cognitive to reactive fear circuits in the brain and reducing amygdala–cortical connectivity during both fear acquisition and extinction. With an analysis of representational pattern similarity between the acquisition and extinction phases, we further demonstrate that proximal threats impaired extinction efficacy via persistent multivariate representations of conditioned learning in the cerebellum, which predicted susceptibility to later fear reinstatement. These results show that conditioned threats encountered in close proximity are more resistant to extinction learning and suggest that the canonical neural circuitry typically associated with fear learning requires additional consideration of a more reactive neural fear system to fully account for this effect.