The direct modulation of subthalamic nucleus (STN) neurons by dopamine (DA) neurons of the substantia nigra (SN) is controversial owing to the thick caliber and low density of DA axons in the STN. The abnormal activity of the STN in Parkinson's disease (PD), which is central to the appearance of symptoms, is therefore thought to result from the loss of DA in the striatum. We carried out three experiments in rats to explore the function of DA in the STN: (i) light and electron microscopic analysis of tyrosine hydroxylase (TH)‐, dopamine β‐hydroxylase (DβH)‐ and DA‐immunoreactive structures to determine whether DA axons form synapses; (ii) fast‐scan cyclic voltammetry (FCV) to determine whether DA axons release DA; and (iii) patch clamp recording to determine whether DA, at a concentration similar to that detected by FCV, can modulate activity and synaptic transmission/integration. TH‐ and DA‐immunoreactive axons mostly formed symmetric synapses. Because DβH‐immunoreactive axons were rare and formed asymmetric synapses, they comprised the minority of TH‐immunoreactive synapses. Voltammetry demonstrated that DA release was sufficient for the activation of receptors and abolished by blockade of voltage‐dependent Na⁺ channels or removal of extracellular Ca²⁺. The lifetime and concentration of extracellular DA was increased by blockade of the DA transporter. Dopamine application depolarized STN neurons, increased their frequency of activity and reduced the impact of γ‐aminobutyric acid (GABA)‐ergic inputs. These findings suggest that SN DA neurons directly modulate the activity of STN neurons and their loss may contribute to the abnormal activity of STN neurons in PD.