Mice lacking protein kinase Cε (PKCε) are supersensitive to positive allosteric modulators of gamma aminobutyrate type A (GABA_A) receptors. Since many of these compounds are anxiolytic, we examined whether anxiety-like behavior is altered in these mice. PKCε-null mice showed reduced anxiety-like behavior and reduced levels of the stress hormones corticosterone and adrenocorticotrophic hormone (ACTH). This was associated with increased sensitivity to neurosteroid modulators of GABA_A receptors. Treatment of PKCε-null mice with the GABA_A receptor antagonist bicuculline restored corticosterone levels and anxiety-like behavior to wild-type levels. These results suggest that increased GABA_A receptor sensitivity to neurosteroids contributes to reduced anxiety-like behavior and stress hormone responses in PKCε-null mice. The findings also suggest PKCε as a possible therapeutic target for development of anxiolytics.