Disorders of anxiety and fear dysregulation are highly prevalent. These disorders affect women approximately 2 times more than they affect men, occur predominately during a woman's reproductive years, and are especially prevalent at times of hormonal flux. This implies that gender differences and sex steroids play a key role in the regulation of anxiety and fear. However, the underlying mechanism by which these factors regulate emotional states in either sex is still largely unknown. This review discusses animal studies describing sex-differences in and gonadal steroid effects on affect and emotional learning. The effects of gonadal hormones on the modulation of anxiety, with particular emphasis on progesterone's ability to reduce the responsiveness of female rats to corticotropin releasing factor and the sex-specific effect of testosterone in the reduction of anxiety in male rats, is discussed. In addition, gonadal hormone and gender modulation of emotional learning is considered and preliminary data are presented showing that estrogen (E2) disrupts fear learning in female rats, probably through the antagonistic effect of ERalpha and ERbeta activation.