Survival relies on the ability to discriminate between danger and safety. Fear discrimination is crucial for appropriate adaptive responses while fear generalization is important for recalling and avoiding dangerous situations. Previous research suggests that fear discrimination learning is mediated by the prefrontal cortex (PFC). It has been demonstrated that disruption in either cAMP element response binding protein (CREB), its co-activator, CREB binding protein (CBP), or N-methyl D-apsarate (NMDA) receptor function specifically within the PFC causes deficits in fear discrimination. Mice exhibiting disruption of these signalling pathways show normal fear responses to aversive stimuli but inappropriate fear responses to similar, yet distinct, non-aversive stimuli. Recent evidence suggests that the prelimbic (PL) and infralimbic (IL) subregions of the PFC provide excitatory and inhibitory effects on the fear circuit, respectively, but the subregion-specific mechanisms driving fear discrimination are unknown. To get insight into the circuit mechanisms underlying fear discrimination, we investigated prefrontal neuronal ensembles representing distinct experiences associated with learning to disambiguate between dangerous and similar, yet distinct, harmless stimuli. We show distinct quantitative activation differences in response to conditioned and generalized fear responses, as well as modulation of neuronal ensembles associated with successful acquisition of contextual fear. Prefrontal neuronal ensembles of fear memories trace functional context-danger and context-safety associations. The PL subdivision of the PFC monitors context-danger associations to conditioned fear, whereas fear discrimination learning engages memory ensembles associated with the inhibition of generalized fear in both PL and IL subdivisions of the PFC. Our data suggests that fear discrimination learning is associated with the modulation of prefrontal memory representations in a subregion- and experience-specific manner while learning appropriate responses to conditioned and generalized fear experiences is driven by updating and rebalancing these prefrontal memory ensembles. These findings provide novel insight into prefrontal mechanisms that underlie fear generalization, a common symptom in patients with posttraumatic stress disorder, phobia and generalized anxiety disorder.