Empathy measured through observational fear in rodents has been associated with increased theta oscillations in the anterior cingulate cortex (ACC). However, upstream circuit mechanisms modulating these oscillations and the extent of the oscillations' role in empathy-related behaviors remain elusive. We found that in mice, ACC theta oscillations are involved in empathy-driven prosocial allogrooming. Moreover, orexinergic neurons are selectively activated in the ACC during observational fear and prosocial allogrooming, but only when the animals had prior fear experience. Real-time, gaze-dependent optogenetic inhibition of lateral hypothalamic orexinergic inputs to ACC suppressed theta power and reduced both behaviors. These findings show that hypothalamic orexinergic inputs drive ACC theta oscillations to modulate observational fear and prosocial behaviors, providing circuit-level insight into how affective empathy translates into prosocial action.