The ability to generalize previously learned information to novel situations is fundamental for adaptive behavior. However, too wide or too narrow generalization is linked to neuropsychiatric disorders. Previous research suggests that interactions between the dopaminergic system and the hippocampus may play a role in generalization, but whether and how the degree of generalization can be modulated via these pathways is currently unknown. Here, we addressed this question in humans using pharmacology, functional magnetic resonance imaging, and computational modeling. Blocking dopamine D2-receptors (D2R) altered generalization behavior as revealed by an increased kurtosis of the generalization gradient, and a decreased width of model-derived generalization parameters. Moreover, D2R-blockade modulated similarity-based responses in the hippocampus and decreased midbrain-hippocampal connectivity, which in turn correlated with individual differences in generalization. These results suggest that dopaminergic activity in the hippocampus may relate to the degree of generalization and highlight a potential target for treatment.