Although an influence of adult neurogenesis in mediating some of the effects of antidepressants has received considerable attention in recent years, much less is known about how alterations in this form of plasticity may contribute to psychiatric disorders such as anxiety and depression. One way to begin to address this question is to link the functions of adult-born hippocampal neurons with specific endophenotypes of these disorders. Recent studies have implicated adult-born hippocampal neurons in pattern separation, a process by which similar experiences or events are transformed into discrete, non-overlapping representations. Here we propose that impaired pattern separation underlies the overgeneralization often seen in anxiety disorders, specifically post-traumatic stress disorder and panic disorder, and therefore represents an endophenotype for these disorders. The development of new, pro-neurogenic compounds may therefore have therapeutic potential for patients who display pattern separation deficits.