The interconnected nuclei of the ventral basal ganglia have long been identified as key regulators of motivated behavior, and dysfunction of this circuit is strongly implicated in mood and substance use disorders. The ventral pallidum (VP) is a central node of the ventral basal ganglia, and recent studies have revealed complex VP cellular heterogeneity and cell- and circuit-specific regulation of reward, aversion, motivation, and drug-seeking behaviors. Although the VP is canonically considered a relay and output structure for this circuit, emerging data indicate that the VP is a central hub in an extensive network for reward processing and the regulation of motivation that extends beyond classically defined basal ganglia borders. VP neurons respond temporally faster and show more advanced reward coding and prediction error processing than neurons in the upstream nucleus accumbens, and regulate the activity of the ventral mesencephalon dopamine system. This review will summarize recent findings in the literature and provide an update on the complex cellular heterogeneity and cell- and circuit-specific regulation of motivated behaviors and reinforcement by the VP with a specific focus on mood and substance use disorders. In addition, we will discuss mechanisms by which stress and drug exposure alter the functioning of the VP and produce susceptibility to neuropsychiatric disorders. Lastly, we will outline unanswered questions and identify future directions for studies necessary to further clarify the central role of VP neurons in the regulation of motivated behaviors.