Fear discrimination is the ability to distinguish between different sources or types of fear-inducing stimuli or situations. Accurate threat discrimination through fear learning is essential for survival, whereas overgeneralized fear is a characteristic feature of anxiety disorders, including posttraumatic stress disorder (PTSD). The contextual differential fear conditioning paradigm using a mouse model, in which individuals are required to differentiate between safe and threatening contexts, provides a valuable model for investigating fear discrimination. The prelimbic (PL) subregion of the ventromedial prefrontal cortex (vmPFC) is believed to play a pivotal role in regulating these processes. Previous research has explored the importance of an amygdala-hippocampal-prefrontal circuit in fear learning, yet the specific roles of the PL substructure remain unclear. Prior studies have emphasized the role of long-term memory formation in the vmPFC for contextual differential fear learning. However, how the local PL network, consisting of hundreds of neurons, functions concerning fear discrimination has not been fully explored due to the complexity of the recordings and the length of behavioral design. This study investigates the role of network population dynamics within PL during a fear-safety learning task discriminating between ambiguous aversive and safe environments, using large-scale population recordings with calcium imaging during a contextual fear discrimination learning paradigm. Our behavioral results indicate that PL memory consolidation is not required for fear acquisition or generalization but is critical for distinguishing between similar yet distinct safe and dangerous contexts during the later stages of discrimination. Since PL has been shown to be involved with fear expression, an initial hypothesis is that we will observe similar population dynamics during fear generalization and differential dynamics after successful discrimination. An alternative hypothesis is that PL's function is to integrate contextual information and guide behavior in situations of contextual ambiguity. Using calcium imaging in mice and advanced unsupervised analysis techniques, this research reveals specific groups of neurons that respond to safe and dangerous cues throughout the learning paradigm. Blocking memory consolidation impairs fear discrimination and the development of neurons relevant to fear discrimination. This highlights the PL's role in processing contextual information, particularly in ambiguous environments.