Substantia nigra pars reticulata (SNr) is a key basal ganglia output nucleus critical for movement control. Its GABA-containing projection neurons intermingle with nigral dopamine (DA) neuron dendrites. Here we show that SNr GABA neurons coexpress dopamine D(1) and D(5) receptor mRNAs and also mRNA for TRPC3 channels. Dopamine induced an inward current in these neurons and increased their firing frequency. These effects were mimicked by D(1)-like agonists, blocked by a D(1)-like antagonist. D(1)-like receptor blockade reduced SNr GABA neuron firing frequency and increased their firing irregularity. These D(1)-like effects were absent in D(1) or D(5) receptor knock-out mice and inhibited by intracellularly applied D(1) or D(5) receptor antibody. These D(1)-like effects were also inhibited when the tonically active TRPC3 channels were inhibited by intracellularly applied TRPC3 channel antibody. Furthermore, stimulation of DA neurons induced a direct inward current in SNr GABA neurons that was sensitive to D(1)-like blockade. Manipulation of DA neuron activity and DA release and inhibition of dopamine reuptake affected SNr GABA neuron activity in a D(1)-like receptor-dependent manner. Together, our findings indicate that dendritically released dopamine tonically excites SNr GABA neurons via D(1)-D(5) receptor coactivation that enhances constitutively active TRPC3 channels, forming an ultra-short substantia nigra pars compacta --> SNr dopamine pathway that regulates the firing intensity and pattern of these basal ganglia output neurons.