Degeneration of nigrostriatal dopaminergic system is the principal lesion in Parkinson's disease. Because glial cell line-derived neurotrophic factor (GDNF) promotes survival of dopamine neurons in vitro and in vivo, intracranial delivery of GDNF has been attempted for Parkinson's disease treatment but with variable success. For improving GDNF-based therapies, knowledge on physiological role of endogenous GDNF at the sites of its expression is important. However, due to limitations of existing genetic model systems, such knowledge is scarce. Here, we report that prevention of transcription of Gdnf 3'UTR in Gdnf endogenous locus yields GDNF hypermorphic mice with increased, but spatially unchanged GDNF expression, enabling analysis of postnatal GDNF function. We found that increased level of GDNF in the central nervous system increases the number of adult dopamine neurons in the substantia nigra pars compacta and the number of dopaminergic terminals in the dorsal striatum. At the functional level, GDNF levels increased striatal tissue dopamine levels and augmented striatal dopamine release and re-uptake. In a proteasome inhibitor lactacystin-induced model of Parkinson's disease GDNF hypermorphic mice were protected from the reduction in striatal dopamine and failure of dopaminergic system function. Importantly, adverse phenotypic effects associated with spatially unregulated GDNF applications were not observed. Enhanced GDNF levels up-regulated striatal dopamine transporter activity by at least five fold resulting in enhanced susceptibility to 6-OHDA, a toxin transported into dopamine neurons by DAT. Further, we report how GDNF levels regulate kidney development and identify microRNAs miR-9, miR-96, miR-133, and miR-146a as negative regulators of GDNF expression via interaction with Gdnf 3'UTR in vitro. Our results reveal the role of GDNF in nigrostriatal dopamine system postnatal development and adult function, and highlight the importance of correct spatial expression of GDNF. Furthermore, our results suggest that 3'UTR targeting may constitute a useful tool in analyzing gene function.