The salience of natural or artificial rewards is mediated by phasic dopamine release in the nucleus accumbens arising from dopaminergic cell bodies in the ventral tegmental area (VTA). Circulating sex steroid hormones modulate rewards associated with drugs of abuse, yet the brain regions through which this modulation occurs still remain unclear.  The medial preoptic area (mPOA) is a locus involved in the expression of naturally rewarding behaviors as well as the regulation and reception of circulating sex steroid hormones in female rats. Considering its role in regulating naturally rewarding behaviors, its well-established anatomical connectivity with the VTA, and its responsiveness to circulating sex steroid hormones, the mPOA is an ideal neural node through which hormones can modulate rewarding facets of drugs of abuse. Here we show that preoptotegmental efferents to the VTA are primarily GABAergic, they appose putative dopaminergic cell bodies in the VTA, and are potentially responsive to sex steroid hormones and dopamine signaling. Furthermore, cocaine influences neural activity in mPOA efferents that project to the VTA. Removal of the mPOA enhanced cocaine-induced locomotion and Fos-immunoreactivity in the mesolimbic reward system and augmented conditioned place preference. Together these findings show that the mPOA modulates the release of dopamine in the mesolimbic reward circuitry via inhibitory connections with dopamine-containing cells residing in the VTA, and sex steroid hormones, in turn, may act in the mPOA to modulate reward response.