Neuropeptides within the central nucleus of the amygdala (CeA) potently modulate neuronal excitability and have been shown to regulate conditioned threat discrimination and anxiety. Here, we investigated the role of κ opioid receptor (KOR) and its endogenous ligand dynorphin in the CeA for regulation of conditioned threat discrimination and anxiety-like behavior in mice. We demonstrate that reduced KOR expression through genetic inactivation of the KOR encoding gene, Oprk1, in the CeA results in increased anxiety-like behavior and impaired conditioned threat discrimination. In contrast, reduction of dynorphin through genetic inactivation of the dynorphin encoding gene, Pdyn, in the CeA has no effect on anxiety or conditioned threat discrimination. However, inactivation of Pdyn from multiple sources, intrinsic and extrinsic to the CeA phenocopies Oprk1 inactivation. These findings suggest that dynorphin inputs to the CeA signal through KOR to promote threat discrimination and dampen anxiety.