GABAergic neurons in the laterodorsal tegmental nucleus (LDT^GABA) encode aversion by directly inhibiting mesolimbic dopamine (DA). Yet, the detailed cellular and circuit mechanisms by which these cells relay unpleasant stimuli to DA neurons and regulate behavioral output remain largely unclear. Here, we show that LDT^GABA neurons bidirectionally respond to rewarding and aversive stimuli in mice. Activation of LDT^GABA neurons promotes aversion and reduces DA release in the lateral nucleus accumbens. Furthermore, we identified two molecularly distinct LDT^GABA cell populations. Somatostatin-expressing (Sst⁺) LDT^GABA neurons indirectly regulate the mesolimbic DA system by disinhibiting excitatory hypothalamic neurons. In contrast, Reelin-expressing LDT^GABA neurons directly inhibit downstream DA neurons. The identification of separate GABAergic subpopulations in a single brainstem nucleus that relay unpleasant stimuli to the mesolimbic DA system through direct and indirect projections is critical for establishing a circuit-level understanding of how negative valence is encoded in the mammalian brain.