Potentiation of glutamate responses is a critical synaptic response to cocaine exposure in ventral tegmental area (VTA) neurons. However, the mechanism by which cocaine exposure promotes potentiation of NMDA receptors (NMDARs) and subsequently AMPA receptors (AMPARs) is not fully understood. In this study we demonstrate that repeated cocaine treatment causes loss of D2 dopamine receptor functional responses via interaction with lysosome-targeting G-protein-associated sorting protein1 (GASP1). We also show that the absence of D2 downregulation in GASP1-KO mice prevents cocaine-induced potentiation of NMDAR currents, elevation of the AMPA/NMDA ratio, and redistribution of NMDAR and AMPAR subunits to the membrane. As a pharmacological parallel, coadministration of the high-affinity D2 agonist, aripiprazole, reduces not only functional downregulation of D2s in response to cocaine but also potentiation of NMDAR and AMPAR responses in wild-type mice. Together these data suggest that functional loss of D2 receptors is a critical mechanism mediating cocaine-induced glutamate plasticity in VTA neurons.