Animal studies using chronic social defeat stress (CSDS) in mice showed that brain-derived neurotrophic factor (BDNF) signaling in the mesolimbic dopamine (DA) circuit is important for the development of social aversion. However, the downstream molecular targets after BDNF release from ventral tegmental area (VTA) DA terminals are unknown. Here, we show that depressive-like behaviors induced by CSDS are mediated in part by Gadd45b downstream of BDNF signaling in the nucleus accumbens (NAc). We show that Gadd45b mRNA levels are increased in susceptible but not resilient mice. Intra-NAc infusion of BDNF or optical stimulation of VTA DA terminals in NAc enhanced Gadd45b expression levels in the NAc. Importantly, Gadd45b downregulation reversed social avoidance in susceptible mice. Together, these data suggest that Gadd45b in NAc contributes to susceptibility to social stress. In addition, we investigated the function of Gadd45b in demethylating CpG islands of representative gene targets, which have been associated with a depressive phenotype in humans and animal models. We found that Gadd45b downregulation changes DNA methylation levels in a phenotype-, gene-, and locus-specific fashion. Together, these results highlight the contribution of Gadd45b and changes in DNA methylation in mediating the effects of social stress in the mesolimbic DA circuit.