Opioid analgesics exert their therapeutic and adverse effects by activating mu opioid receptors (MOPR), however functional responses to MOPR activation are modulated by distinct signal transduction complexes within the brain. The ventrolateral periaqueductal gray (vlPAG) plays a critical role in modulation of nociception and analgesia, but the exact intracellular pathways associated with opioid responses in this region are not fully understood. We previously showed that knockout of the signal transduction modulator RGSz1 (RGSZ1KO) enhanced analgesic responses to opioids, while it decreased the rewarding efficacy of morphine. Here, we applied viral mediated gene transfer and delivered AAV-Cre viruses to the vlPAG of RGSz1 mice to demonstrate that downregulation of RGSz1 in this region decreases sensitivity to morphine in the place preference paradigm, under pain-free as well as neuropathic pain states. We also utilized retrograde viral vectors along with flipase-dependent Cre vectors to conditionally downregulate RGSz1 in vlPAG projections to the ventral tegmental area (VTA) and show that downregulation of RGSz1 prevents the development of place conditioning to low morphine doses. Consistent with the role for RGSz1 as a negative modulator of MOPR activity, RGSz1KO enhances opioid-induced cAMP inhibition in PAG membranes. Furthermore, using a new generation of BRET sensors, we demonstrate that RGSz1 modulates Galphaz but not other Gai subunits, and selectively impedes MOPR-mediated Galphaz signaling events invoked by morphine and other opioids. Our work highlights a regional and circuit-specific role of the G protein signaling modulator RGSz1 in morphine reward, providing insights on midbrain intracellular pathways that control addiction-related behaviors. In this study we used advanced genetic mouse models to highlight the role of the signal transduction modulator named RGSz1 in responses to clinically used opioid analgesics. We show that RGSz1 controls the rewarding efficacy of opioids by actions in vlPAG projections to the ventral tegmental area, a key component of the midbrain dopamine pathway. These studies highlight novel mechanisms by which pain-modulating structures control the rewarding efficacy of opioids.