Perceptual decisions are based on sensory information but can also be influenced by expectations built from recent experiences. Can the impact of expectations be flexibly modulated based on the outcome of previous decisions? Here, rats perform an auditory task where the probability to repeat the previous stimulus category is varied in trial-blocks. All rats capitalize on these sequence correlations by exploiting a transition bias: a tendency to repeat or alternate their previous response using an internal estimate of the sequence repeating probability. Surprisingly, this bias is null after error trials. The internal estimate however is not reset and it becomes effective again after the next correct response. This behavior is captured by a generative model, whereby a reward-driven modulatory signal gates the impact of the latent model of the environment on the current decision. These results demonstrate that, based on previous outcomes, rats flexibly modulate how expectations influence their decisions.