Neural circuits that enable an organism to protect itself by promoting escape from immediate threat and avoidance of future injury are conceptualized to carry an “aversive” signal. One of the key molecular elements of these circuits is the kappa opioid receptor (KOR) and its endogenous peptide agonist, dynorphin. In many cases, the aversive response to an experimental manipulation can be eliminated by selective blockade of KOR function, indicating its necessity in transmitting this signal. The dopamine system, through its contributions to reinforcement learning, is also involved in processing of aversive stimuli, and KOR control of dopamine in the context of aversive behavioral states has been intensely studied. In this review, we have discussed the multiple ways in which the KORs regulate dopamine dynamics with a central focus on dopamine neurons and projections from the ventral tegmental area. At the neuronal level, KOR agonists inhibit dopamine neurons both in the somatodendritic region as well as at terminal release sites, through various signaling pathways and ion channels, and these effects are specific to different synaptic sites. While the dominant hypotheses are that aversive states are driven by decreases in dopamine and increases in dynorphin, reported exceptions to these patterns indicate these ideas require refinement. This is critical given that KOR is being considered as a target for development of new therapeutics for anxiety, depression, pain, and other psychiatric disorders.