Imagination is an internal simulation of real-life events and a common treatment tool for anxiety disorders; however, the neural processes by which imagination exerts behavioral control are unclear. This investigation tests whether and how imagined exposures to a threatening stimulus, conditioned in the real world, influence neural and physiological manifestations of threat. We found that imagined and real extinction are equally effective in the reduction of threat-related neural patterns and physiological responses elicited upon re-exposure to real-world threatening cues. Network connectivity during the extinction phase showed that imagined, like real, extinction engaged the ventromedial prefrontal cortex (vmPFC) as a central hub. vmPFC, primary auditory cortex, and amygdala activation during imagined and real extinction were predictive of individual differences in extinction success. The nucleus accumbens, however, predicted extinction success in the imagined extinction group alone. We conclude that deliberate imagination can attenuate reactions to threat through perceptual and associative learning mechanisms.