Blunted sensitivity to ethanol's aversive effects can increase motivation to consume ethanol; yet, the neurobiological circuits responsible for encoding these aversive properties are not fully understood. Plasticity in cells projecting from the insular cortex (IC) to the basolateral amygdala (BLA) is critical for taste aversion learning and retrieval, suggesting this circuit's potential involvement in modulating the aversive properties of ethanol. Here, we tested the hypothesis that GABAergic activity onto IC-BLA projections would be facilitated following the retrieval of an ethanol-conditioned taste aversion (CTA). Consistent with this hypothesis, frequency of mIPSCs was increased following retrieval of an ethanol-CTA across cell layers in IC-BLA projection neurons. This increase in GABAergic plasticity occurred in both a circuit-specific and learning-dependent manner. Additionally, local inhibitory inputs onto layer 2/3 IC-BLA projection neurons were greater in number and strength following ethanol-CTA. Finally, DREADD-mediated inhibition of IC parvalbumin-expressing cells blunted the retrieval of ethanol-CTA in male, but not female, mice. Collectively, this work implicates a circuit-specific and learning-dependent increase in GABAergic tone following retrieval of an ethanol-CTA, thereby advancing our understanding of how the aversive effects of ethanol are encoded in the brain.