Dopamine (DA) neurons in the ventral tegmental area (VTA) are critical to coping with stress. However, molecular mechanisms regulating their activity and stress-induced depression were not well understood. We found that the receptor tyrosine kinase ErbB4 in VTA was activated in stress-susceptible mice. Deleting ErbB4 in VTA or in DA neurons, or chemical genetic inhibition of ErbB4 kinase activity in VTA suppressed the development of chronic social defeat stress (CSDS)-induced depression-like behaviors. ErbB4 activation required the expression of NRG1 in the laterodorsal tegmentum (LDTg); LDTg-specific deletion of NRG1 inhibited depression-like behaviors. NRG1 and ErbB4 suppressed potassium currents of VTA DA neurons and increased their firing activity. Finally, we showed that acute inhibition of ErbB4 after stress attenuated DA neuron hyperactivity and expression of depression-like behaviors. Together, these observations demonstrate a critical role of NRG1-ErbB4 signaling in regulating depression-like behaviors and identify an unexpected mechanism by which the LDTg-VTA circuit regulates the activity of DA neurons.