Muscarinic modulation of mesolimbic dopaminergic neurons in the ventral tegmental area (VTA) plays an important role in reward, potentially mediated through the M5 muscarinic acetylcholine receptor (M5R). However, the key sites for M5R-mediated control of dopamine neurons within this region are still unknown. To address this question we examined the electron microscopic immunocytochemical localization of antipeptide antisera against M5R and the plasmalemmal dopamine transporter (DAT) in single sections through the rat VTA. M5R was located mainly to VTA somatodendritic profiles (71%; n = 627), at least one-third (33.2%; n = 208) of which also contained DAT. The M5R immunoreactivity was distributed along cytoplasmic tubulovesicular endomembrane systems in somata and large dendrites, but was more often located at plasmalemmal sites in small dendrites, the majority of which did not express DAT. The M5R-immunoreactive dendrites received a balanced input from unlabeled terminals forming either asymmetric or symmetric synapses. Compared with dendrites, M5R was less often seen in axon terminals, comprising only 10.8% (n = 102) of the total M5R-labeled profiles. These terminals were usually presynaptic to unlabeled dendrites, suggesting that M5R activation can indirectly modulate non–DAT-containing dendrites through presynaptic mechanisms. Our results provide the first ultrastructural evidence that in the VTA, M5R has a subcellular location conducive to major involvement in postsynaptic signaling in many dendrites, only some of which express DAT. These findings suggest that cognitive and rewarding effects ascribed to muscarinic activation in the VTA can primarily be credited to M5R activation at postsynaptic plasma membranes distinct from dopamine transport. J. Comp. Neurol. 521: 2927–2946, 2013.