Dopaminergic signaling plays an important role in associative learning including fear and extinction learning. Dopaminergic midbrain neurons encode prediction error-like signals when threats differ from expectations. Within the amygdala, GABAergic intercalated cell (ITC) clusters receive one of the densest dopaminergic projections, but their physiological consequences are incompletely understood. ITCs are important for fear extinction, a function thought to be supported by activation of ventromedial ITC cluster that inhibits central amygdala fear output. In mice, we reveal two distinct novel mechanisms how mesencephalic dopaminergic afferents control ITCs. Firstly, they co-release GABA to mediate rapid, direct inhibition. Secondly, dopamine suppresses inhibitory interactions between distinct ITC clusters via presynaptic D1-receptors. Early extinction training augments both, GABA co-release onto dorso-medial ITCs and dopamine-mediated suppression of dorso- to ventromedial inhibition between ITC clusters. These findings provide novel insights into dopaminergic mechanisms shaping the activity balance between distinct ITC clusters that could support their opposing roles in fear behavior.