Striatal medium spiny neurons (MSNs) integrate multiple external inputs to shape motor output. In addition, MSNs form local inhibitory synaptic connections with one another. The function of striatal lateral inhibition is unknown, but one possibility is in selecting an intended action while suppressing alternatives. Action selection is disrupted in several movement disorders, including levodopa-induced dyskinesia (LID), a complication of Parkinson's disease (PD) therapy characterized by involuntary movements. Here, we identify chronic changes in the strength of striatal lateral inhibitory synapses in a mouse model of PD/LID. These synapses are also modulated by acute dopamine signaling. Chemogenetic suppression of lateral inhibition originating from dopamine D2 receptor-expressing MSNs lowers the threshold to develop involuntary movements in vivo , supporting a role in motor control. By examining the role of lateral inhibition in basal ganglia function and dysfunction, we expand the framework surrounding the role of striatal microcircuitry in action selection.