The lateral amygdala (LA) encodes fear memories by potentiating sensory inputs associated with threats and, in the process, recruits 10-30% of its neurons per memory engram. However, how the network within the LA processes this information, and whether it also plays a role in storing it, is still largely unknown. Using ex vivo 12 patch clamp and in-vivo 32 electrode electrophysiological recordings, in combination with activity-dependent fluorescent and optogenetic tagging and recall, we identified between principal LA neurons in rats a sparsely connected network that is organized in clusters and in which connections between recruited neurons specifically potentiate after fear learning. Our findings of synaptic plasticity in an auto-associative excitatory network of the LA suggest a basic cortical principle through which a small number of pyramidal neurons could encode a large number of memories.