L-3, 4-Dihydroxyphenylalanine (L-DOPA)-induced dyskinesia (LID) is a major clinical complication in the treatment of Parkinson's disease (PD). This debilitating side effect likely reflects aberrant compensatory responses for a combination of dopaminergic neuron denervation and repeated L-DOPA administration. Abnormal endogenous opioid signal transduction pathways in basal ganglia have been well documented in LID. Opioid receptors have been targeted to alleviate the dyskinesia. However, the exact role of this altered opioid activity is remains under active investigation. In the present review, we discuss the current understanding of opioid signal transduction in the basal ganglia and how the malfunction of opioid signaling contributes to the pathophysiology of LID. Further study of the opioid system in LID may lead to new therapeutic targets and improved treatment of PD patients.