While both males and females become addicted to cocaine, females transition to dependence faster, take more cocaine, experience more adverse consequences and have more difficulty remaining abstinent in both humans and animal models. The underlying neural mechanisms controlling these sexual‐dimorphisms in motivated behaviors and how they mediate the increased abuse liability of cocaine in females remain unclear. Here, we define a sex‐specific neural mechanism contributing to this enhanced cocaine reward in females. Using a combination of in vivo electrophysiology of ventral tegmental area (VTA) dopamine neurons and fast scan cyclic voltammetry in the nucleus accumbens (NAc), in vivo calcium imaging and conditioned place preference, we were able to record pathway specific VTA and NAc responses to contextual cues that were previously paired with cocaine in male mice and in intact females over different stages of the estrous cycle. Using ELISA we measured circulating levels of ovarian hormones and determined their relationship to estrous cycle dependent fluctuations in reward processing. Finally using designer receptors exclusively activated by designer drugs (DREADDs) we manipulated mesolimbic dopamine system activity to directly link downstream alterations in dopamine transporter function to activity dependent changes at the level of the VTA. We identified an estrous‐cycle dependent enhancement of dopaminergic function in both the VTA and NAc, which acts to increase dopaminergic responses to salient stimuli. This enhancement is converged with an increased ability of cocaine to augment synaptic dopamine levels due to a robust increase in cocaine's ability to bind directly to the dopamine transporter and inhibit its uptake function selectively during estrus. These changes were linked to alterations in circulating estradiol levels, which predicted changes in both VTA firing rate as well as cocaine effects at the dopamine transporter. Using DREADD‐induced activation of VTA dopamine neurons to enhance firing we were able to mimic the effects of estrous cycle on the dopamine system and subsequent reward processing in both diestrus females and males. Importantly, these changes lead to not only enhanced reward processing during estrus, but potent and long‐lasting associations between the rewarding effects of cocaine and associated environmental cues that extend to other stages of the estrous cycle. Together we define a basic mechanism by which estrous cycle dependent changes in the dopamine transporter underlies susceptibility to cocaine addiction by promoting persistent cue‐reward associations that can precipitate relapse. Since enhanced drug seeking is characteristic of individuals who transition to addiction, our findings which reveal novel sex‐specific factors controlling drug seeking are critical to guiding evidence‐based therapeutic interventions for female addicts.Support or Funding InformationThis work was supported by grants from the National Institute on Drug Abuse (E.J.N., R01 DA14133), (E.S.C. K99 DA042111); The Brain and Behavior Research Foundation (NARSAD, E.S.C.); National Institute of Mental Health (E.J.N., R01 MH51399, P50 MH096890) and National Institute of Alcoholism and Alcohol Abuse (M.H.H.R01 AA022445; B.J. F31 AA022862).