Phosphodiesterase type 4 (PDE4) is a family of enzymes that selectively degrade intracellular cAMP. PDE4 inhibitors have been shown to regulate the rewarding and reinforcing effects of cocaine, but the underlying mechanisms remain poorly understood. Here we show that pretreatments with the PDE4 inhibitor rolipram attenuated cocaine-induced locomotor sensitization in mice. Repeated cocaine exposure in vivo caused a decrease in inhibitory postsynaptic currents (IPSCs) and an increase in the AMPAR/NMDAR ratio in ventral tegmental area (VTA) dopamine neurons in midbrain slices ex vivo. Cocaine exposure disrupted the balance between excitation and inhibition as shown by an increase in the excitation to inhibition (E/I) ratio. Rolipram pretreatments in vivo prevented cocaine-induced reductions in GABAergic inhibition but did not further increase cocaine-induced potentiation of excitation, leading to the restoration of a balance between excitation and inhibition and normalization of the E/I ratio. In support of this idea, we found that repeated cocaine exposure led to an increase in the single-unit action potential firing rate in vivo in VTA dopamine neurons, which was blocked by rolipram pretreatments. These results suggest that repeated cocaine exposure in vivo disrupts the balance between excitation and inhibition in VTA dopamine neurons, while PDE4 inhibition reestablishes the balance between excitation and inhibition through distinct mechanisms.