Cognitive changes in addicts and animals exposed to addictive drugs have been extensively investigated over the past decades. One advantage of studying addiction using cognitive paradigms is that neural processing in addicts or drug-exposed animals can be compared to that in normal subjects. Tests of cognitive flexibility that measure the ability to change responding to a previously rewarded or punished stimulus are of potential interest in the study of addiction, because addiction can itself be viewed as an inability to change responding to stimuli previously associated with drug reward. One such test is reversal learning, which is impaired in cocaine addicts and animals that have chronically self-administered or been exposed to cocaine. A circuit including orbitofrontal cortex, basolateral amygdala and striatum subserves reversal learning. In rats that have been previously exposed to cocaine, neurons in these regions show selective and distinct changes in how they encode information during reversal learning. These changes suggest that in these rats, orbitofrontal cortex loses the ability to signal expected outcomes, and basolateral amygdala becomes inflexible in its encoding of cue significance. These changes could explain cocaine-induced impairments to cognitive flexibility and may have theoretical importance in addiction.