The striatum is richly innervated by mesencephalic dopaminergic neurons that modulate a diverse array of cellular and synaptic functions that control goal-directed actions and habits. The loss of this innervation has long been thought to be the principal cause of the cardinal motor symptoms of Parkinson's disease (PD). Moreover, chronic, pharmacological overstimulation of striatal dopamine (DA) receptors is generally viewed as the trigger for levodopa-induced dyskinesia (LID) in late-stage PD patients. Here, we discuss recent advances in our understanding of the relationship between the striatum and DA, particularly as it relates to PD and LID. First, it has become clear that chronic perturbations of DA levels in PD and LID bring about cell type-specific, homeostatic changes in spiny projection neurons (SPNs) that tend to normalize striatal activity. Second, perturbations in DA signaling also bring about non-homeostatic aberrations in synaptic plasticity that contribute to disease symptoms. Third, it has become evident that striatal interneurons are major determinants of network activity and behavior in PD and LID. Finally, recent work examining the activity of SPNs in freely moving animals has revealed that the pathophysiology induced by altered DA signaling is not limited to imbalance in the average spiking in direct and indirect pathways, but involves more nuanced disruptions of neuronal ensemble activity.