The midbrain periaqueductal gray (PAG) and its descending projections to the rostral ventromedial medulla (RVM) provides an essential neural circuit for the antinociceptive effects of opiates, and has been implicated in the development of tolerance to morphine. Systemic morphine activates a greater proportion of PAG–RVM neurons in male vs female rats, and induces tolerance to a greater degree in males. The present studies tested the hypothesis that if the PAG–RVM pathway is essential for the development of tolerance, then: (i) morphine activation of the PAG–RVM pathway should decline as tolerance develops; and (ii) sex differences in the development of tolerance to morphine should be reflected as a greater decline in the activation of this pathway in males. These hypotheses were tested in male and female rats using behavioral testing (hot-plate) and immunohistochemistry to map the activation of the PAG–RVM pathway following repeated morphine administration (5 mg/kg; s.c.). In males, morphine potency decreased from 3.0 to 6.3 mg/kg, indicating tolerance, and this was paralleled by a steady decline in the percentage of PAG–RVM output neurons activated by morphine. In contrast, in females the shift in morphine potency was significantly attenuated (D50 6–8.3 mg/kg), and no significant difference in the activity of PAG–RVM output neurons was noted. These results demonstrate that the greater development of tolerance to morphine administration in male rats corresponds with a significant reduction in the activation of the PAG–RVM circuit and suggest a central role for the PAG in the development of tolerance to morphine.