Repeated stress has been suggested to underlie learning and memory deficits via the basolateral amygdala (BLA) and the hippocampus; however, the functional contribution of BLA inputs to the hippocampus and their molecular repercussions are not well understood. Here we show that repeated stress is accompanied by generation of the Cdk5 (cyclin-dependent kinase 5)-activator p25, up-regulation and phosphorylation of glucocorticoid receptors, increased HDAC2 expression, and reduced expression of memory-related genes in the hippocampus. A combination of optogenetic and pharmacosynthetic approaches shows that BLA activation is both necessary and sufficient for stress-associated molecular changes and memory impairments. Furthermore, we show that this effect relies on direct glutamatergic projections from the BLA to the dorsal hippocampus. Finally, we show that p25 generation is necessary for the stress-induced memory dysfunction. Taken together, our data provide a neural circuit model for stress-induced hippocampal memory deficits through BLA activity-dependent p25 generation.