Research suggests sleep plays a role in the consolidation of recently acquired memories for long-term storage. rapid eye movement (REM) sleep has been shown to play a complex role in emotional-memory processing, and may be involved in subsequent waking-day emotional reactivity and amygdala responsivity. Interaction of the hippocampus and basolateral amygdala with the medial-prefrontal cortex is associated with sleep-dependent learning and emotional memory processing. REM is also implicated in post-traumatic stress disorder (PTSD), which is characterized by sleep disturbance, heightened reactivity to fearful stimuli, and nightmares. Many suffers of PTSD also exhibit dampened medial-prefrontal cortex activity. However, the effects of PTSD-related brain changes on REM-dependent consolidation or the notion of ‘over-consolidation’ (strengthening of memory traces to such a degree that they become resistant to extinction) have been minimally explored. Here, we posit that (in addition to sleep architecture changes) the memory functions of REM must also be altered in PTSD. We propose a model of REM-dependent consolidation of learned fear in PTSD and examine how PTSD-related brain changes might interact with fear learning. We argue that reduced efficacy of inhibitory medial-prefrontal pathways may lead to maladaptive processing of traumatic memories in the early stages of consolidation after trauma.