Action selection relies on the coordinated activity of striatal direct and indirect pathway medium spiny neurons (dMSNs and iMSNs, respectively). Loss of dopamine in Parkinson's disease is thought to disrupt this balance. While dopamine replacement with levodopa may restore normal function, the development of involuntary movements (levodopa-induced dyskinesia [LID]) limits therapy. How chronic dopamine loss and replacement with levodopa modulate the firing of identified MSNs in behaving animals is unknown. Using optogenetically labeled striatal single-unit recordings, we assess circuit dysfunction in parkinsonism and LID. Counter to current models, we found that following dopamine depletion, iMSN firing was elevated only during periods of immobility, while dMSN firing was dramatically and persistently reduced. Most notably, we identified a subpopulation of dMSNs with abnormally high levodopa-evoked firing rates, which correlated specifically with dyskinesia. These findings provide key insights into the circuit mechanisms underlying parkinsonism and LID, with implications for developing targeted therapies.