Anxiety disorders and alcohol use disorder are highly comorbid, yet identifying neural dysfunction driving comorbidity has been challenging. Lateral orbitofrontal cortex (lOFC) dysfunction has been independently observed in each disorder. Here we tested the hypothesis that the lOFC is essential to partition mechanisms for fear regulation and alcohol consumption. Specifically, the capacity to regulate fear and the propensity to consume alcohol are unrelated when lOFC is intact, but become linked through lOFC dysfunction. Male Long Evans rats received bilateral, neurotoxic lOFC lesions or sham surgery. Fear regulation was determined by establishing discrimination to danger, uncertainty, and safety cues then shifting the shock probability of the uncertainty cue. Alcohol consumption was assessed through voluntary, intermittent access to 20% ethanol. The neurotoxic lesion approach ensured lOFC dysfunction spanned testing in fear regulation and alcohol consumption. LOFC-lesioned rats demonstrated maladaptive fear generalization during probability shifts, inverting normal prediction error assignment, and subsequently consumed more alcohol. Most novel, fear regulation and alcohol consumption were inextricably linked only in lOFC-lesioned rats: extreme fear regulation predicted excessive alcohol consumption. The results reveal the lOFC is essential to partition mechanisms for fear regulation and alcohol consumption and uncover a plausible source of neural dysfunction contributing to comorbid anxiety disorders and alcohol use disorder.