Considering the time of year,It is possible that there is a pregnant raccoon nesting there that has no ability or intention of moving, --or worse, one that already has young that your dog is either frightening to death or habituating to a dog's barking--neither a good situation. If there has been a birth, that could be what has heightened your dog's interest.

I suspect that as soon as it is feasible to do so, the raccoon will respond to your dog's attention by moving. In the meantime, it probably believes the only safe place for it is inside the fence. You might want to curb your dog for awhile, at least at regular and predictable times of the day, until the raccoon is able to relocate.

Raccoons sometimes carry parasites that dogs can catch. That is a good reason not to remove the fence.
Also, if there is a body of water near or on your property, be aware that a large raccoon can sometimes drown a pursuing dog.

If you are unable to curb your dog, you might want to try spraying the fence with a dog-cat repellent such as is used on furniture. Possibly it might mask the smell of the raccoon from your dog, or even give the raccoon the idea that the location no longer belongs to it.

or call a professional ... last thing you need is a wild animal.. giving your dog rabies ... perhaps the vet can recommend someone ... or the yellow pages under pest control ....

life is not a disney movie ... and wild animals are not our friends ... especially masked ones.. lol ... protect yourself..

ken

Thanks all for the advice. We humans like to hang out on the deck in the back during the evenings, preferably with the dog, but I will try the repellent and limit my dog to the front yard during those times. No bodies of water nearby, so that is not a worry. I probably should have mentioned that there are generally no issues during the day, I guess because the raccoon is mostly inactive. If it is still there at the end of the summer, I will take further action, like calling a specialist or something.

if its still there in fall.. and it breeds.. then next year.. you will 4 or 5 to worry about ... that really doesnt solve your problem ...

ken

Now hang on a minute.

The problem isn't the raccoon, it is your dog. You're just assuming that the raccoon (if it exists at all) is causing your dog to go nutso. The simple fact is that the raccoon is doing *nothing* to you; your dog is. Attack the problem where it exists. Deal with the dog.