Trace amine-associated receptor 1 (TAAR1) is a G protein-coupled receptor (GPCR) that is nonselectively activated by endogenous metabolites of amino acids. TAAR1 is considered a promising drug target for the treatment of psychiatric and neurodegenerative disorders. However, no selective ligand to identify TAAR1-specific signaling mechanisms is available yet. Here we report a selective TAAR1 antagonist, EPPTB, and characterize its physiological effects at dopamine (DA) neurons of the ventral tegmental area (VTA). We show that EPPTB prevents the reduction of the firing frequency of DA neurons induced by p-tyramine (p-tyr), a nonselective TAAR1 agonist. When applied alone, EPPTB increases the firing frequency of DA neurons, suggesting that TAAR1 either exhibits constitutive activity or is tonically activated by ambient levels of endogenous agonist(s). We further show that EPPTB blocks the TAAR1-mediated activation of an inwardly rectifying K(+) current. When applied alone, EPPTB induces an apparent inward current, suggesting the closure of tonically activated K(+) channels. Importantly, these EPPTB effects were absent in Taar1 knockout mice, ruling out off-target effects. We additionally found that both the acute application of EPPTB and the constitutive genetic lack of TAAR1 increase the potency of DA at D2 receptors in DA neurons. In summary, our data support that TAAR1 tonically activates inwardly rectifying K(+) channels, which reduces the basal firing frequency of DA neurons in the VTA. We hypothesize that the EPPTB-induced increase in the potency of DA at D2 receptors is part of a homeostatic feedback mechanism compensating for the lack of inhibitory TAAR1 tone.