Long noncoding RNAs (lncRNAs) represent a multidimensional class of regulatory molecules that are involved in many aspects of brain function. Emerging evidence indicates that lncRNAs are localized to the synapse; however, a direct role for their activity in this subcellular compartment in memory formation has yet to be demonstrated. Using lncRNA capture-seq, we identified a specific set of lncRNAs that accumulate in the synaptic compartment within the infralimbic prefrontal cortex of adult male C57/Bl6 mice. Among these was a splice variant related to the stress-associated lncRNA, Gas5. RNA immunoprecipitation followed by mass spectrometry and single-molecule imaging revealed that this Gas5 isoform, in association with the RNA binding proteins G3BP2 and CAPRIN1, regulates the activity-dependent trafficking and clustering of RNA granules. In addition, we found that cell-type-specific, activity-dependent, and synapse-specific knockdown of the Gas5 variant led to impaired fear extinction memory. These findings identify a new mechanism of fear extinction that involves the dynamic interaction between local lncRNA activity and RNA condensates in the synaptic compartment.