Cocaine reinforcement is mediated by increased extracellular dopamine levels in the forebrain. This neurochemical effect was thought to require inhibition of dopamine reuptake, but cocaine is still reinforcing even in the absence of the dopamine transporter. Here, we demonstrate that the rapid elevation in dopamine levels and motor activity elicited by cocaine involves α1 receptor activation within the ventral midbrain. Activation of α1 receptors increases dopaminergic neuron burst firing by decreasing the calcium-activated potassium channel current (SK), as well as elevates dopaminergic neuron pacemaker firing through modulation of both SK and the hyperpolarization-activated cation currents (Ih). Furthermore, we found that cocaine increases both the pacemaker and burst-firing frequency of rat ventral-midbrain dopaminergic neurons through an α1 adrenergic receptor-dependent mechanism within the ventral tegmental area and substantia nigra pars compacta. These results demonstrate the mechanism underlying the critical role of α1 adrenergic receptors in the regulation of dopamine neurotransmission and behavior by cocaine.