The mediodorsal thalamic nucleus has been implicated in the control of memory processes. However, the underlying neural mechanism remains unclear. Here we provide evidence for bidirectional modulation of fear extinction by the mediodorsal thalamic nucleus. Mice with a knockout or mediodorsal thalamic nucleus-specific knockdown of phospholipase C β4 exhibited impaired fear extinction. Mutant mediodorsal thalamic nucleus neurons in slices showed enhanced burst firing accompanied by increased T-type Ca(2+) currents; blocking of T channels in vivo rescued the fear extinction. Tetrode recordings in freely moving mice revealed that, during extinction, the single-spike (tonic) frequency of mediodorsal thalamic nucleus neurons increased in wild-type mice, but was static in mutant mice. Furthermore, tonic-evoking microstimulations of the mediodorsal thalamic nucleus, contemporaneous with the extinction tones, rescued fear extinction in mutant mice and facilitated it in wild-type mice. In contrast, burst-evoking microstimulation suppressed extinction in wild-type mice, mimicking the mutation. These results suggest that the firing mode of the mediodorsal thalamic nucleus is critical for the modulation of fear extinction.