A balanced interaction between dopaminergic and cholinergic signaling in the striatum is critical to goal-directed behavior. But how this interaction modulates corticostriatal synaptic plasticity underlying learned actions remains unclear—particularly in direct-pathway spiny projection neurons (dSPNs). Our studies show that in dSPNs, endogenous cholinergic signaling through M4 muscarinic receptors (M4Rs) promoted long-term depression of corticostriatal glutamatergic synapses, by suppressing regulator of G protein signaling type 4 (RGS4) activity, and blocked D1 dopamine receptor dependent long-term potentiation (LTP). Furthermore, in a mouse model of L-3,4-dihydroxyphenylalanine (L-DOPA)-induced dyskinesia (LID) in Parkinson's disease (PD), boosting M4R signaling with positive allosteric modulator (PAM) blocked aberrant LTP in dSPNs, enabled LTP reversal, and attenuated dyskinetic behaviors. An M4R PAM also was effective in a primate LID model. Taken together, these studies identify an important signaling pathway controlling striatal synaptic plasticity and point to a novel pharmacological strategy for alleviating LID in PD patients.