Midbrain dopaminergic (DA) neurons are thought to guide learning via phasic elevations of firing in response to reward predicting stimuli. The mechanism for these signals remains unclear. Using extracellular recording during associative learning, we found that inhibitory neurons in the ventral midbrain of mice responded to salient auditory stimuli with a burst of activity that occurred before the onset of the phasic response of DA neurons. This population of inhibitory neurons exhibited enhanced responses during extinction and was anticorrelated with the phasic response of simultaneously recorded DA neurons. Optogenetic stimulation revealed that this population was, in part, derived from inhibitory projection neurons of the substantia nigra that provide a robust monosynaptic inhibition of DA neurons. Thus, our results elaborate on the dynamic upstream circuits that shape the phasic activity of DA neurons and suggest that the inhibitory microcircuit of the midbrain is critical for new learning in extinction.