Drugs of abuse exert their effects by exploiting natural neurobiological reward mechanisms, especially the mesolimbic dopamine (DA) system. However, the mesolimbic system does not operate in isolation, and input from other reward-relevant structures may play a role in cocaine's rewarding effects. The medial preoptic area (mPOA) of the hypothalamus is involved in the regulation of two essential and naturally rewarding behaviors: sexual and maternal behaviors. It also makes strong neuroanatomical connections with areas of the mesolimbic system, particularly the ventral tegmental area (VTA). As such, the mPOA is a logical candidate for a neuroanatomical locus modulating activity in the mesolimbic system and emergent behavioral expressions of drug reward, yet the role of this structure is largely unexplored. Here, using a female rat model, we show that the mPOA innervates the VTA in a region-specific manner, that lesions of the mPOA augment cocaine-induced Fos expression in the nucleus accumbens (NAc) and cocaine-induced conditioned place preference. We also show that approximately 68% of mPOA-VTA efferents release γ-aminobutyric acid (GABA), over 75% are sensitive to DA as evidenced by colocalization with DA receptors, and nearly 60% of these contain both DA receptors and GABA, which suggests a novel key role for the mPOA in the inhibition of the mesolimbic DA circuit. Combined, these results reveal the mPOA as a critical modulating structure in cocaine-induced mesolimbic activity and behavioral manifestation of reward, at least in part, via GABAergic output that is sensitive to DA input.