Traumatic events during early life may affect the neural systems associated with memory function, including extinction, and lead to altered sensitivity to stress later in life. We recently reported that changes in prefrontal synaptic efficacy in response to extinction trials did not occur in adult rats exposed to early postnatal stress (i.e. footshock [FS] stress during postnatal day 21-25 [3W-FS group]). However, identifying neurocircuitry and neural mechanisms responsible for extinction retrieval after extinction training have not been precisely determined. The present study explored whether synaptic transmission in the hippocampal-medial prefrontal cortex (mPFC) neural pathway is altered by extinction retrieval on the day after extinction trials using electrophysiological approaches combined with behavioral analysis. We also elucidated the effects of early postnatal stress on the synaptic response in this neural circuit underlying extinction retrieval. Evoked potential in the mPFC was enhanced following extinction retrieval, accompanied by reduced freezing behavior. This synaptic facilitation (i.e. a long-term potentiation [LTP]-like response) did not occur; rather synaptic inhibition was observed in the 3W-FS group, accompanied by sustained freezing. The behavioral deficit and synaptic inhibition observed in the 3W-FS group were time-dependently ameliorated by the partial N-methyl-D-aspartate (NMDA) receptor agonist D-cycloserine (15 mg/kg, i.p.). These findings suggest that the LTP-like response in the hippocampal-mPFC pathway is associated with extinction retrieval of context-dependent fear memory. Early postnatal stress appears to induce neurodevelopmental dysfunction of this neural circuit and lead to impaired fear extinction later in life. The present data indicate that psychotherapy accompanied by pharmacological interventions that accelerate and strengthen extinction, such as d-cycloserine treatment, may have therapeutic potential for the treatment of anxiety disorders, including posttraumatic stress disorder.