GABAB receptors in habenula cholinergic neurons mediate strong presynaptic excitation and control aversive memory expression. K+ channel tetramerization domain (KCTD) proteins are key interacting partners of GABAB receptors; it remains unclear whether and how KCTDs contribute to GABAB excitatory signaling. Here, we show that KCTD8 and KCTD12 in these neurons facilitate the GABAB receptors expression in axonal terminals and contribute to presynaptic excitation by GABAB receptors. Genetically knocking out KCTD8/12/16 or KCTD8/12, but not other combinations of the three KCTD isoforms, substantially reduced GABAB receptors-mediated potentiation of glutamate release and presynaptic Ca2+ entry in response to axonal stimulation, whereas they had no effect on GABAB-mediated inhibition in the somata of cholinergic neurons within the habenulo-interpeduncular pathway in mice of either sex. The physiological phenotypes were associated with a significant decrease in the GABAB expression within the axonal terminals but not the somata. Overexpressing either KCTD8 or KCTD12 in the KCTD8/12/16 triple knock-out mice reversed the changes in axonal GABAB expression and presynaptic excitation. In mice lacking the KCTDs, aversion-predicting cues produced stronger neuronal activation in the interpeduncular nucleus, and the infusion of GABAB agonist in this nucleus produced a weaker effect on fear extinction. Collectively, our results reveal isoform-specific roles of KCTD proteins in enriching the axonal expression of GABAB receptors, facilitating their presynaptic signaling, and modulating aversion-related memory processes.SIGNIFICANCE STATEMENT GABAB receptors represent the principal inhibitory neurotransmitter receptor, but they mediate strong presynaptic excitation in the habenulo-interpeduncular pathway and modulate aversion memory expression. KCTD proteins are integral constituents of GABAB receptors. By analyzing the physiological, neuroanatomical, and behavioral phenotypes of multiple KCTD knock-out mouse lines, we show that KCTD8 and KCTD12 facilitate the axonal expression and hence presynaptic excitation of GABAB receptors in habenula cholinergic neurons and control cued-aversion memory formation and expression in the habenulo-interpeduncular pathway. These results expand the physiological and behavioral functions of KCTDs in modulating the brain neural circuits.