The lateral habenula (LHb) is involved in reward, aversion, addiction and depression through descending interactions with several brain structures, including the ventral tegmental area (VTA). The VTA provides reciprocal inputs to LHb, but their actions are unclear. Here we show that the majority of rat and mouse VTA neurons innervating LHb coexpress markers for both glutamate signaling (vesicular glutamate transporter 2; VGluT2) and GABA signaling (glutamic acid decarboxylase; GAD, and vesicular GABA transporter; VGaT). A single axon from these mesohabenular neurons coexpresses VGluT2 protein and VGaT protein and, surprisingly, establishes symmetric and asymmetric synapses on LHb neurons. In LHb slices, light activation of mesohabenular fibers expressing channelrhodopsin2 driven by VGluT2 (Slc17a6) or VGaT (Slc32a1) promoters elicits release of both glutamate and GABA onto single LHb neurons. In vivo light activation of mesohabenular terminals inhibits or excites LHb neurons. Our findings reveal an unanticipated type of VTA neuron that cotransmits glutamate and GABA and provides the majority of mesohabenular inputs.