Mice lacking protein kinase Cepsilon (PKCepsilon) 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. PKCepsilon-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 PKCepsilon-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 PKCepsilon-null mice. The findings also suggest PKCepsilon as a possible therapeutic target for development of anxiolytics.