Although the biochemical signaling events in area CA1 of the hippocampus underlying memory acquisition, consolidation, retrieval, and extinction have been extensively studied, little is known about the activity dynamics of hippocampal neurons in CA1 during Pavlovian fear conditioning. Here, we use fiber-optic confocal microscopy coupled with the calcium indicator GCaMP6m to monitor neuron activity in freely moving mice during trace fear conditioning. We show that the activity of a group of CA1 neurons increases not only after the stimulus presentations, but also during the stimulus-free trace period when the conditioned mice exhibit a high level of freezing behavior. Therefore, we designate these cells "trace cells". Interestingly, the activity of the trace cells increases in response to the conditioned stimuli during memory retrieval but diminishes during memory extinction. Importantly, the dynamics of neuron activity exhibit a high degree of correlation with the freezing behavior of the mice, suggesting that a neuronal ensemble responsible for encoding the trace fear memory is repeatedly reactivated during memory retrieval and later extinguished during memory extinction.