The ventral pallidum (VP) contains GABA and glutamate neurons projecting to ventral tegmental area (VTA) whose stimulation drives approach and avoidance, respectively. Yet little is known about the mechanisms by which VP cell types shape VTA activity and drive behavior. Here, we found that both VP GABA and glutamate neurons were activated during approach to reward or by delivery of an aversive stimulus. Stimulation of VP GABA neurons inhibited VTA GABA, but activated dopamine and glutamate neurons. Remarkably, stimulation-evoked activation was behavior-contingent such that VTA recruitment was inhibited when evoked by the subjects own action. Conversely, VP glutamate neurons activated VTA GABA, as well as dopamine and glutamate neurons, despite driving aversion. However, VP glutamate neurons evoked dopamine in aversion-associated ventromedial nucleus accumbens (NAc), but reduced dopamine release in reward-associated dorsomedial NAc. These findings show how heterogeneous VP projections to VTA can be engaged to shape approach and avoidance behaviors.