GABAergic transmission in the amygdala modulates the expression of anxiety. Understanding the interplay between GABAergic transmission and excitatory circuits in the amygdala is, therefore, critical for understanding the neurobiological basis of anxiety. Here, we used a multi-disciplinary approach to demonstrate that GluR5-containing kainate receptors regulate local inhibitory circuits, modulate the excitatory transmission from the basolateral amygdala to the central amygdala, and control behavioral anxiety. Genetic deletion of GluR5 or local injection of a GluR5 antagonist into the basolateral amygdala increases anxiety-like behavior. Activation of GluR5 selectively depolarized inhibitory neurons, thereby increasing GABA release and contributing to tonic GABA current in the basolateral amygdala. The enhanced GABAergic transmission leads to reduced excitatory inputs in the central amygdala. Our results suggest that GluR5 is a key regulator of inhibitory circuits in the amygdala and highlight the potential use of GluR5-specific drugs in the treatment of pathological anxiety.