Depolarization of axons is necessary for somatic action potentials to trigger axonal neurotransmitter release. Here we show that striatal cholinergic interneurons (ChIs) and nicotinic receptors (nAChRs) on mouse dopamine axons interrupt this relationship. After nAChR-mediated depolarization, dopamine release by subsequent depolarization events was suppressed for ~100 ms. This suppression was not due to depletion of dopamine or acetylcholine, but to a limited reactivation of dopamine axons after nAChR-mediated depolarization, and is more prominent in dorsal than in ventral striatum. In vivo, nAChRs predominantly depressed dopamine release, as nAChR antagonism in dorsal striatum elevated dopamine detected with optic-fiber photometry of dopamine sensor GRAB_DA2m and promoted conditioned place preference. Our findings reveal that ChIs acting via nAChRs transiently limit the reactivation of dopamine axons for subsequent action potentials in dopamine neurons and therefore generate a dynamic inverse scaling of dopamine release according to ChI activity.