Brain-derived neurotrophic factor (BDNF) is widely accepted for its involvement in resilience and antidepressant drug action, is a common genetic locus of risk for mental illnesses, and remains one of the most prominently studied molecules within psychiatry. Stress, which arguably remains the "lowest common denominator" risk factor for several mental illnesses, targets BDNF in disease-implicated brain regions and circuits. Altered stress-related responses have also been observed in animal models of BDNF deficiency in vivo, and BDNF is a common downstream intermediary for environmental factors that potentiate anxiety- and depressive-like behavior. However, BDNF's broad functionality has manifested a heterogeneous literature; likely reflecting that BDNF plays a hitherto under-recognized multifactorial role as both a regulator and target of stress hormone signaling within the brain. The role of BDNF in vulnerability to stress and stress-related disorders, such as posttraumatic stress disorder (PTSD), is a prominent example where inconsistent effects have emerged across numerous models, labs, and disciplines. In the current review we provide a contemporary update on the neurobiology of BDNF including new data from the behavioral neuroscience and neuropsychiatry literature on fear memory consolidation and extinction, stress, and PTSD. First we present an overview of recent advances in knowledge on the role of BDNF within the fear circuitry, as well as address mounting evidence whereby stress hormones interact with endogenous BDNF-TrkB signaling to alter brain homeostasis. Glucocorticoid signaling also acutely recruits BDNF to enhance the expression of fear memory. We then include observations that the functional common BDNF Val66Met polymorphism modulates stress susceptibility as well as stress-related and stress-inducible neuropsychiatric endophenotypes in both man and mouse. We conclude by proposing a BDNF stress-sensitivity hypothesis, which posits that disruption of endogenous BDNF activity by common factors (such as the BDNF Val66Met variant) potentiates sensitivity to stress and, by extension, vulnerability to stress-inducible illnesses. Thus, BDNF may induce plasticity to deleteriously promote the encoding of fear and trauma but, conversely, also enable adaptive plasticity during extinction learning to suppress PTSD-like fear responses. Ergo regulators of BDNF availability, such as the Val66Met polymorphism, may orchestrate sensitivity to stress, trauma, and risk of stress-induced disorders such as PTSD. Given an increasing interest in personalized psychiatry and clinically complex cases, this model provides a framework from which to experimentally disentangle the causal actions of BDNF in stress responses, which likely interact to potentiate, produce, and impair treatment of, stress-related psychiatric disorders.