Drug-evoked synaptic plasticity in the mesolimbic system reshapes circuit function and drives drug-adaptive behavior. Much research has focused on excitatory transmission in the ventral tegmental area (VTA) and the nucleus accumbens (NAc). How drug-evoked synaptic plasticity of inhibitory transmission affects circuit adaptations remains unknown. We found that medium spiny neurons expressing dopamine (DA) receptor type 1 (D1R-MSNs) of the NAc project to the VTA, strongly preferring the GABA neurons of the VTA. Repeated in vivo exposure to cocaine evoked synaptic potentiation at this synapse, occluding homosynaptic inhibitory long-term potentiation. The activity of the VTA GABA neurons was thus reduced and DA neurons were disinhibited. Cocaine-evoked potentiation of GABA release from D1R-MSNs affected drug-adaptive behavior, which identifies these neurons as a promising target for novel addiction treatments.