Anxiety is an affective state defined by heightened arousal and unease in the absence of a clear and present fear-inducing stimulus. Chronic and inappropriate anxiety leads to anxiety disorders, the most common class of human mental disorder. Recent work suggests projections to the ventral tegmental area (VTA), are critical for anxiety behavior expression. However, the relationship between efferent VTA projections and anxiety is unclear. This thesis resolves anxiety circuitry connecting the dopaminergic (DAergic) VTA to the interpeduncular nucleus (IPN), coined the mesointerpeduncular circuit. I hypothesize the mesointerpeduncular circuit affects anxiety through the release of anxiogenic corticotropin releasing factor (CRF) during nicotine withdrawal and anxiolytic dopamine (DA) during drug naïve behavior. Electrophysiological and pharmacological data suggest CRF release from the DAergic VTA during nicotine withdrawal activates CRF receptor 1 (CRFR1) potentiating the glutamatergic activation of “Type 2” neurons and anxiety-like behavior in mice. However, in nicotine naïve conditions CRF production is negligible. Instead, in vivo DA release is anticorrelated with anxiety-like behaviors. Optogenetic stimulation and inhibition drives decreased and increased anxiety-like behaviors, respectively. Electrophysiological experiments reveal a complex interpeduncular microcircuit where D1-like DA receptor expressing “Type C” neurons in the caudal IPN (cIPN) regulate glutamatergic release in the ventral IPN (vIPN) through presynaptic GABA receptors. The result is propagation of the signal to excite “Type A” and inhibit “Type B” vIPN neurons. Finally, pharmacological activation or inhibition of interpeduncular D1-like DA receptors is sufficient to decrease and increase anxiety-like behaviors respectively. Thus, this circuit is important for modulating anxiety-like behavior.