Striatal activity is dynamically modulated by acetylcholine and dopamine, both of which are essential for basal ganglia function. Synchronized pauses in the activity of striatal cholinergic interneurons (ChINs) are correlated with elevated activity of midbrain dopaminergic neurons, whereas synchronous firing of ChINs induces local release of dopamine. The mechanisms underlying ChIN synchronization and its interplay with dopamine release are not fully understood. Here we show that polysynaptic inhibition between ChINs is a robust network motif and instrumental in shaping the network activity of ChINs. Action potentials in ChINs evoke large inhibitory responses in multiple neighboring ChINs, strong enough to suppress their tonic activity. Using a combination of optogenetics and chemogenetics we show the involvement of striatal tyrosine hydroxylase-expressing interneurons in mediating this inhibition. Inhibition between ChINs is attenuated by dopaminergic midbrain afferents acting presynaptically on D2 receptors. Our results present a novel form of interaction between striatal dopamine and acetylcholine dynamics.