Innate fear has a critical role in survival of animals. Unlike conditioned fear, the neuronal circuitry underlying innate fear is largely unknown. We found that the laterodorsal tegmentum (LDT) and lateral habenula (LHb) are specifically activated by the mouse predator odorant trimethylthiazoline (TMT). Using optogenetics to selectively stimulate GABAergic neurons in the LDT immediately produced fear-like responses (freezing, accelerated heart rate and increased serum corticosterone), whereas prolonged stimulation caused anxiety-like behaviors. Notably, although selective stimulation of parvalbumin (PV)-positive interneurons similarly induced fear-like responses, stimulation of somatostatin-positive interneurons or inhibition of PV neurons in the LDT suppressed TMT-induced fear-like responses without affecting conditioned fear. Finally, activation of LHb glutamatergic inputs to LDT interneurons was sufficient to generate fear-like responses. Thus, the LHb-LDT pathway is important for regulating olfactory cue-induced innate fear. Our results provide a potential target for therapeutic intervention for anxiety disorder.