l-3,4-Dihydroxyphenylalanine (l-dopa) remains the most effective pharmacological treatment for relief of the severe motor impairments of Parkinson’s disease. It is very effective in controlling parkinsonian symptoms in the initial phase of the disease, but its action wanes with time. Such ‘wearing-off’ imposes an escalation in the dosage of the drug, which ultimately fails to provide stable control of motor symptoms and results in the appearance of abnormal involuntary movements or dyskinesia. ‘Peak-dose’l-dopa-induced dyskinesia (LID) currently represents one of the major challenges in the treatment of Parkinson’s disease. Accumulating evidence suggests that LID derives from overstimulation of dopamine receptors located on the GABAergic medium spiny neurons (MSNs) of the dorsal striatum. These neurons form two distinct projection pathways, which exert opposite effects on motor activity: the direct, striatonigral pathway promotes locomotion, whereas the indirect, striatopallidal pathway depresses locomotion. In order to understand the mechanisms underlying LID, it is important to identify molecular adaptations produced by chronic administration of l-dopa, at the level of one or the other of these two neuronal populations. This review summarizes the results of recent studies indicating that LID is associated with abnormal dopamine D1 receptor signaling affecting the MSNs of the direct pathway. The role of this pathological adaptation and of the consequent changes in signaling in the development and expression of LID are discussed.