Glucocorticoids reduce phobic fear in patients with anxiety disorders. Previous studies have shown that fear-related activation of the amygdala can be mediated through the visual cortical pathway, which includes the fusiform gyrus, or through other pathways. However, it is not clear which of the pathways that activate the amygdala is responsible for the pathophysiology of a specific phobia and how glucocorticoid treatment alleviates fear processing in these neural networks. We recorded the brain activity with functional magnetic resonance imaging in patients with spider phobia, who received either 20 mg of cortisol or a placebo while viewing pictures of spiders. We also tested healthy participants who did not receive any medication during the same task. We performed dynamic causal modelling (DCM), a connectivity analysis, to examine the effects of cortisol on the networks involved in processing fear and to examine if there was an association between these networks and the symptoms of the phobia. Cortisol administration suppressed the phobic stimuli-related amygdala activity to levels comparable to the healthy participants and reduced subjective phobic fear. The DCM analysis revealed that cortisol administration suppressed the aberrant inputs into the amygdala that did not originate from the visual cortical pathway, but rather from a fast subcortical pathway mediated by the pulvinar nucleus, and suppressed the interactions between the amygdala and fusiform gyrus. This network changes were distinguishable from healthy participants and considered the residual changes under cortisol administration. We also found that the strengths of the aberrant inputs into the amygdala were positively correlated with the severity of spider phobia. This study demonstrates that patients with spider phobia show an aberrant functional connectivity of the amygdala when they are exposed to phobia-related stimuli and that cortisol administration can alleviate this fear-specific neural connectivity.