Memory persistence is critically influenced by retrieval. In rats, a single presentation of a conditioned fear stimulus induces memory reconsolidation and fear memory persistence, while repeated fear cue presentations result in loss of fear through extinction. These two opposite behavioral outcomes are operationally linked by the number of cue presentations at memory retrieval. However, the behavioral properties and mechanistic determinants of the transition have not yet been explored; in particular, whether reconsolidation and extinction processes coexist or are mutually exclusive, depending on the exposure to non-reinforced retrieval events. We characterized both behaviorally and molecularly the transition from reconsolidation to extinction of conditioned fear and showed that an increase in calcineurin (CaN) in the basolateral amygdala (BLA) supports the shift from fear maintenance to fear inhibition. Gradually increasing the extent of retrieval induces a gradual decrease in freezing responses to the conditioned stimulus and a gradual increase in amygdala CaN level. This newly synthesized CaN is required for the extinction, but not the reconsolidation, of conditioned fear. During the transition from reconsolidation to extinction, we have revealed an insensitive state of the fear memory where NMDA-type glutamate receptor agonist and antagonist drugs are unable either to modulate CaN levels in the BLA or alter the reconsolidation or extinction processes. Together, our data indicate both that reconsolidation and extinction are mutually exclusive processes and also reveal the presence of a transitional, or "limbo," state of the original memory between these two alternative outcomes of fear memory retrieval, when neither process is engaged.