The ability to inhibit action is critical for everyday behavior and is affected by a variety of disorders. Behavioral control and response inhibition is thought to depend on a neural circuit that includes the dorsal striatum, yet the neural signals that lead to response inhibition and its failure are unclear. To address this issue, we recorded from neurons in rat dorsomedial striatum (mDS) in a novel task in which rats responded to a spatial cue that signaled that reward would be delivered either to the left or to the right. On 80% of trials rats were instructed to respond in the direction cued by the light (GO). On 20% of trials a second light illuminated instructing the rat to refrain from making the cued movement and move in the opposite direction (STOP). Many neurons in mDS encoded direction, firing more or less strongly for GO movements made ipsilateral or contralateral to the recording electrode. Neurons that fired more strongly for contralateral GO responses were more active when rats were faster, showed reduced activity on STOP trials, and miscoded direction on errors, suggesting that when these neurons were overly active, response inhibition failed. Neurons that decreased firing for contralateral movement were excited during trials in which the rat was required to stop the ipsilateral movement. For these neurons activity was reduced when errors were made and was negatively correlated with movement time suggesting that when these neurons were less active on STOP trials, response inhibition failed. Finally, the activity of a significant number of neurons represented a global inhibitory signal, firing more strongly during response inhibition regardless of response direction. Breakdown by cell type suggests that putative medium spiny neurons (MSNs) tended to fire more strongly under STOP trials, whereas putative interneurons exhibited both activity patterns.