The need to detect and process sensory cues varies in different behavioral contexts. Plasticity in sensory coding can be achieved by the context-specific release of neuromodulators in restricted brain areas. The context of aversion triggers the release of dopamine in the insect brain, yet the effects of dopamine on sensory coding are unknown. In this study, we characterize the morphology of dopaminergic neurons that innervate each of the antennal lobes (ALs; the first synaptic neuropils of the olfactory system) of the moth Manduca sexta and demonstrate with electrophysiology that dopamine enhances odor-evoked responses of the majority of AL neurons while reducing the responses of a small minority. Because dopamine release in higher brain areas mediates aversive learning we developed a naturalistic, ecologically inspired aversive learning paradigm in which an innately appetitive host plant floral odor is paired with a mimic of the aversive nectar of herbivorized host plants. This pairing resulted in a decrease in feeding behavior that was blocked when dopamine receptor antagonists were injected directly into the ALs. These results suggest that a transient dopaminergic enhancement of sensory output from the AL contributes to the formation of aversive memories. We propose a model of olfactory modulation in which specific contexts trigger the release of different neuromodulators in the AL to increase olfactory output to downstream areas of processing.