The striatum and its ventral extension, the nucleus accumbens, are involved in behaviors as diverse as motor planning, drug seeking, and learning. Invariably, these striatally mediated behaviors depend on intact dopaminergic innervation. However, the mechanisms by which dopamine modulates neuronal function in the striatum and nucleus accumbens have been difficult to elucidate. Recent electrophysiological studies have revealed that dopamine alters both voltage-dependent conductances and synaptic transmission, resulting in state-dependent modulation of target cells. These studies make clear predictions about how dopamine, particularly via D1 receptor activation, should alter the responsiveness of striatal neurons to extrinsic excitatory synaptic activity.