Information flow in neurons proceeds by integrating inputs in dendrites, generating action potentials near the soma, and releasing neurotransmitters from nerve terminals in the axon. We found that in the striatum, acetylcholine-releasing neurons induce action potential firing in distal dopamine axons. Spontaneous activity of cholinergic neurons produced dopamine release that extended beyond acetylcholine-signaling domains, and traveling action potentials were readily recorded from dopamine axons in response to cholinergic activation. In freely moving mice, dopamine and acetylcholine covaried with movement direction. Local inhibition of nicotinic acetylcholine receptors impaired dopamine dynamics and affected movement. Our findings uncover an endogenous mechanism for action potential initiation independent of somatodendritic integration and establish that this mechanism segregates the control of dopamine signaling between axons and somata.