Labile memory is thought to be held in the brain as persistent neural network activity [1-4]. However, it is not known how biologically relevant memory circuits are organized and operate. Labile and persistent appetitive memory in Drosophila requires output after training from the alpha'beta' subset of mushroom body (MB) neurons and from a pair of modulatory dorsal paired medial (DPM) neurons [5-9]. DPM neurons innervate the entire MB lobe region and appear to be pre- and postsynaptic to the MB [7, 8], consistent with a recurrent network model. Here we identify a role after training for synaptic output from the GABAergic anterior paired lateral (APL) neurons [10, 11]. Blocking synaptic output from APL neurons after training disrupts labile memory but does not affect long-term memory. APL neurons contact DPM neurons most densely in the alpha'beta' lobes, although their processes are intertwined and contact throughout all of the lobes. Furthermore, APL contacts MB neurons in the alpha' lobe but makes little direct contact with those in the distal alpha lobe. We propose that APL neurons provide widespread inhibition to stabilize and maintain synaptic specificity of a labile memory trace in a recurrent DPM and MB alpha'beta' neuron circuit.