Excitatory brain synapses are strengthened or weakened in response to specific patterns of synaptic activation, and these changes in synaptic strength are thought to underlie persistent pathologies such as drug addiction, as well as learning. In contrast, there are few examples of synaptic plasticity of inhibitory GABA (gamma-aminobutyric acid)-releasing synapses. Here we report long-term potentiation of GABA(A)-mediated synaptic transmission (LTP(GABA)) onto dopamine neurons of the rat brain ventral tegmental area, a region required for the development of drug addiction. This novel form of LTP is heterosynaptic, requiring postsynaptic NMDA (N-methyl-d-aspartate) receptor activation at glutamate synapses, but resulting from increased GABA release at neighbouring inhibitory nerve terminals. NMDA receptor activation produces nitric oxide, a retrograde signal released from the postsynaptic dopamine neuron. Nitric oxide initiates LTP(GABA) by activating guanylate cyclase in GABA-releasing nerve terminals. Exposure to morphine both in vitro and in vivo prevents LTP(GABA). Whereas brief treatment with morphine in vitro blocks LTP(GABA) by inhibiting presynaptic glutamate release, in vivo exposure to morphine persistently interrupts signalling from nitric oxide to guanylate cyclase. These neuroadaptations to opioid drugs might contribute to early stages of addiction, and may potentially be exploited therapeutically using drugs targeting GABA(A) receptors.