Exposure to drugs of abuse produces robust transcriptional and epigenetic reorganization within brain reward circuits that outlives the direct effects of the drug and may contribute to addiction. DNA methylation is a covalent epigenetic modification that is altered following stimulant exposure and is critical for behavioral and physiological adaptations to drugs of abuse. Although activity-related loss of DNA methylation requires the Gadd45 (Growth arrest and DNA-damage-inducible) gene family, very little is known about how this family regulates the activity of brain reward circuits or behavioral responses to drugs of abuse. Here, we combined genome-wide transcriptional profiling, pharmacological manipulations, electrophysiological measurements, and CRISPR tools with traditional knockout and behavioral approaches in rodent model systems to dissect the role of Gadd45b in dopamine-dependent epigenetic regulation and cocaine reward. We show that acute cocaine administration induces rapid upregulation of Gadd45b mRNA in the rat nucleus accumbens, and that knockout or site-specific CRISPR/Cas9 gene knockdown of Gadd45b blocks cocaine conditioned place preference. In vitro , dopamine treatment in primary striatal neurons increases Gadd45b mRNA expression through a dopamine receptor type 1 (DRD1)-dependent mechanism. Moreover, shRNA-induced Gadd45b knockdown decreases expression of genes involved in psychostimulant addiction, blocks induction of immediate early genes by DRD1 stimulation, and prevents DRD1-mediated changes in DNA methylation. Finally, we demonstrate that Gadd45b knockdown decreases striatal neuron action potential burst duration in vitro , without altering other electrophysiological characteristics. These results suggest that striatal Gadd45b functions as a dopamine-induced gene that is necessary for cocaine reward memory and DRD1-mediated transcriptional activity.