The subgranular zone of the adult hippocampal dentate gyrus contains a pool of neural stem cells that continuously divide and differentiate into functional granule cells. It has been shown that production of new hippocampal neurons is necessary for amelioration of stress-induced behavioral changes by antidepressants in animal models of depression. The survival of newly born hippocampal neurons is decreased by chronic psychosocial stress and increased by exposure to enriched environments. These observations suggest the existence of a link between hippocampal neurogenesis, stress-induced behavioral changes, and the beneficial effects of enriched environment. To show causality, we subjected transgenic mice with conditionally suppressed neurogenesis to psychosocial stress followed by environmental enrichment. First, we showed that repeated social defeat coupled with chronic exposure to an aggressor produces robust and quantifiable indices of submissive and depressive-like behaviors; second, subsequent exposure to an enriched environment led to extinction of the submissive phenotype, while animals exposed to an impoverished environment retained the submissive phenotype; and third, enrichment was not effective in reversing the submissive and depressive-like behaviors in transgenic mice lacking neurogenesis. Our data show two main findings. First, living in an enriched environment is highly effective in extinguishing submissive behavioral traits developed during chronic social stress, and second, these effects are critically dependent on adult neurogenesis, indicating that beneficial behavioral adaptations are dependent on intact adult neurogenesis.