SummaryDiscrimination between predictive and non-predictive threat stimuli decrease as threat intensity increases. The central mechanisms that mediate the transition from discriminatory to generalized threat responding remain poorly resolved. Here, we identify the stress- and dysphoria-associated kappa opioid receptor (KOR) and its ligand dynorphin (Dyn), acting in the ventral tegmental area (VTA), as a key substrate for regulating threat generalization. We identified several dynorphinergic inputs to the VTA and demonstrate that projections from the bed nucleus of the stria terminalis (BNST) and dorsal raphe nucleus (DRN) both contribute to anxiety-like behavior but differentially affect threat generalization. These data demonstrate that conditioned threat discrimination has an inverted ‘U’ relationship with threat intensity and establish a role for KOR/Dyn signaling in the midbrain for promoting threat generalization.