Although bile acids play a notable role in depression, the pathological significance of the bile acid TGR5 membrane-type receptor in this disorder remains elusive. Using depression models of chronic social defeat stress and chronic restraint stress in male mice, we found that TGR5 in the lateral hypothalamic area (LHA) predominantly decreased in GABAergic neurons, the excitability of which increased in depressive-like mice. Upregulation of TGR5 or inhibition of GABAergic excitability in LHA markedly alleviated depressive-like behavior, whereas down-regulation of TGR5 or enhancement of GABAergic excitability facilitated stress-induced depressive-like behavior. TGR5 also bidirectionally regulated excitability of LHA GABAergic neurons via extracellular regulated protein kinases-dependent Kv4.2 channels. Notably, LHA GABAergic neurons specifically innervated dorsal CA3 (dCA3) CaMKIIα neurons for mediation of depressive-like behavior. LHA GABAergic TGR5 exerted antidepressant-like effects by disinhibiting dCA3 CaMKIIα neurons projecting to the dorsolateral septum (DLS). These findings advance our understanding of TGR5 and the LHA→dCA3→DLS circuit for the development of potential therapeutic strategies in depression.