Previous research has focused on how different environments modulate fear learning and the accompanying prioritization of acquired threat cues in sensory cortices. Here, we focus on the other side of the coin and show how the acquisition of threat relevance influences the sensory processing of the environment and an associated context cue. Thereby, we observed that spatial suppression surrounding the focus of threat relevant cues extended by threat learning. By recording frequency-tagged steady-state visual evoked fields (ssVEFs) from 35 healthy participants using Magnetoencephalography (MEG), we replicate earlier findings that centrally presented acquired threat-relevant cues (CS+) evoke greater ssVEF responses, whereas visuocortical engagement during the processing of threat-irrelevant cues (CS-) is inhibited. Critically, as predicted by early computational models of threat learning such as the Rescorla-Wagner model, ssVEF responses to an inter-trial peripheral background flicker (context cue), when no CS was shown, increased linearly during learning. In contrast, visuocortical engagement in the early-tier visual cortex during the processing of the background flicker was strongly reduced during CS presentation in the last learning block. This effect was observed during maximal CS+ and CS- discrimination. However, in more anterior ventral visual cortex, the inhibition of oscillatory responses of the context cue occurred only during CS + trials, whereas during CS- trials, background ssVEF responses were increased. These results are in line with the notion that attentional resources are reallocated flexibly between cues of different threat relevance and that the spatial extension of center surround neuronal competition can be modulated by threat learning.