Dopamine (DA) plays crucial roles in the cognitive functioning of the prefrontal cortex (PFC), which, to a large degree, depends on lasting neural traces formed in prefrontal networks. The establishment of these permanent traces requires changes in cortical synaptic efficacy. DA, via the D(1)-class receptors, is thought to gate or facilitate synaptic plasticity in the PFC, with little role recognized for the D(2)-class receptors. Here we show that, when significantly elevated, DA erodes, rather than facilitates, the induction of long-term potentiation (LTP) in the PFC by acting at the far less abundant cortical D(2)-class receptors through a dominant coupling to the protein phosphatase 1 (PP1) activity in postsynaptic neurons. In mice with persistently elevated extracellular DA, resulting from inactivation of the DA transporter (DAT) gene, LTP in layer V PFC pyramidal neurons cannot be established, regardless of induction protocols. Acute increase of dopaminergic transmission by DAT blockers or overstimulation of D(2) receptors in normal mice have similar LTP shutoff effects. LTP in mutant mice can be rescued by a single in vivo administration of D(2)-class antagonists. Suppression of postsynaptic PP1 mimics and occludes the D(2)-mediated rescue of LTP in mutant mice and prevents the acute erosion of LTP by D(2) agonists in normal mice. Our studies reveal a mechanistically unique heterosynaptic PP1 gate that is constitutively driven by background DA to influence LTP induction. By blocking prefrontal synaptic plasticity, excessive DA may prevent storage of lasting memory traces in PFC networks and impair executive functions.