Social interactions with conspecifics markedly alter the neuroendocrine, behavioral and emotional responses to stressful events. Some of these effects involve observational learning and result in lasting changes of fear-motivated behavior. While most evidence reveals increased fearfulness after observation of fearful demonstrators (models) in a number of species, a few reports from human and non-human primates indicate that observational learning can also attenuate some forms of fear. In the present study, we set out to determine the effects of social modeling and observational learning on fear conditioning in the mouse. Observers were pre-exposed to a novel context in the presence of fearful (F group) or non-fearful (NF group) demonstrators. Mice of the F group acquired control levels of conditioned fear. On the other hand, mice of the NF group exhibited profound and persistent reduction of fear. The decrease of fear in NF observers was most likely due to context-specific impairments of fear conditioning, as revealed by selective effects on long- but not short-term contextual fear memory, and normal fear conditioning in response to a novel context or cue. The effect was lasting, but constrained by the shock intensity. Attenuation of fear conditioning resulting from interactions with non-fearful conspecifics was largely, but not entirely, mediated by vicarious learning. These findings identify an important social buffering process serving to prevent a lasting induction of fear in response to isolated, moderately intense stressful events.