In unpredictable environments, stimuli that predict potential danger or its absence can change rapidly. Therefore, it is highly adaptive to prioritize incoming sensory information flexibly as a function of prior experience. Previously, these changes have only been conceptualized as excitatory gain increases in sensory cortices for acquired fear‐relevant stimuli during associative learning. However, formal descriptions of associative processes by Rescorla and Wagner predict both conditioned excitatory and inhibitory processes in response systems for fear and safety cues, respectively. Magnetocortical steady‐state visual evoked fields (ssVEFs) have been shown to vary in amplitude as a function of associative strength. Therefore, we wondered why previous studies reporting ssVEF modulations by fear learning did not observe conditioned inhibition of ssVEF responses for the safety cue. Three analysis strategies were applied: (1) traditional analysis of ssVEF amplitude at occipital MEG sensors, (2) applying a general linear model (GLM) at each sensor, and (3) fitting the same GLM to cortically localized ssVEF responses. First, we replicated previous findings of increased ssVEFs for acquired fear‐relevant stimuli using all three analysis strategies. Critically, we demonstrated conditioned inhibition of ssVEF responses for fear‐irrelevant cues for specific gradiometer sensor types using the traditional analysis technique and for all sensor types when applying a GLM to the sensor space. However, sensor space effects were rather small. In stark contrast, cortical source space effect sizes were most pronounced. The results of opposing CS+ and CS‐ modulations in sensory cortex reflect predictions of the Rescorla‐Wagner model and current neurobiological findings.