Drugs of abuse are known to cause persistent modification of neural circuits, leading to addictive behaviours^,,,,. Changes in synaptic plasticity in dopamine neurons of the ventral tegmental area (VTA) may contribute to circuit modification induced by many drugs of abuse, including cocaine^,,,,,,,. Here we report that, following repeated exposure to cocaine in vivo, excitatory synapses to rat VTA dopamine neurons become highly susceptible to the induction of long-term potentiation (LTP) by correlated pre- and postsynaptic activity. This facilitated LTP induction is caused by cocaine-induced reduction of GABA_A (γ-aminobutyric acid) receptor-mediated inhibition of these dopamine neurons. In midbrain slices from rats treated with saline or a single dose of cocaine, LTP could not be induced in VTA dopamine neurons unless GABA-mediated inhibition was reduced by bicuculline or picrotoxin. However, LTP became readily inducible in slices from rats treated repeatedly with cocaine; this LTP induction was prevented by enhancing GABA-mediated inhibition using diazepam. Furthermore, repeated cocaine exposure reduced the amplitude of GABA-mediated synaptic currents and increased the probability of spike initiation in VTA dopamine neurons. This cocaine-induced enhancement of synaptic plasticity in the VTA may be important for the formation of drug-associated memory.