How positive and negative affective stimuli interact in the brain to influence behavioral outcomes remains poorly understood. Here, we show that recall of a positively valenced reward-associated cue (reward-conditioned stimulus, CS+) can prevent or reverse fear generalization in mice. Modification of generalized fear by recall of a CS+ is dependent on the midbrain dopamine system and the regulation of discriminatory fear encoding by the central amygdala (CeA). Precisely timed, transient elevations in dopamine are necessary to reverse fear generalization and nondiscriminatory fear encoding in the CeA. Recall of a positive association is also effective at enhancing the extinction of a conditioned fear response in a dopamine-dependent manner. These data demonstrate that recall of a positive experience can be an effective means to suppress generalized fear and show that dopamine projections to the CeA are an important neural substrate for this phenomenon.