Emerging evidence suggests that the largest phytochemical component of cannabis, cannabidiol (CBD), may possess pharmacotherapeutic properties in the treatment of neuropsychiatric disorders. CBD has been reported to functionally interact with both the mesolimbic dopamine (DA) and serotonergic (5-HT) receptor systems. However, the underlying mechanisms by which CBD may modulate emotional processing are not currently understood. Using a combination of in vivo electrophysiological recording and fear conditioning in rats, the present study aimed to characterize the behavioral, neuroanatomical, and pharmacological effects of CBD within the mesolimbic pathway, and its possible functional interactions with 5-HT and DAergic transmission. Using targeted microinfusions of CBD into the shell region of the mesolimbic nucleus accumbens (NASh), we report that intra-NASh CBD potently blocks the formation of conditioned freezing behaviors. These effects were challenged with DAergic, cannabinoid CB1 receptor, and serotonergic (5-HT1A) transmission blockade, but only 5-HT1A blockade restored associative conditioned freezing behaviors. In vivo intra-ventral tegmental area (VTA) electrophysiological recordings revealed that behaviorally effective doses of intra-NASh CBD elicited a predominant decrease in spontaneous DAergic neuronal frequency and bursting activity. These neuronal effects were reversed by simultaneous blockade of 5-HT1A receptor transmission. Finally, using a functional contralateral disconnection procedure, we demonstrated that the ability of intra-NASh CBD to block the formation of conditioned freezing behaviors was dependent on intra-VTA GABAergic transmission substrates. Our findings demonstrate a novel NAcVTA circuit responsible for the behavioral and neuronal effects of CBD within the mesolimbic system via functional interactions with serotonergic 5-HT1A receptor signaling.