Parkinson’s resting tremor is related to altered cerebral activity in the basal ganglia and the cerebello-thalamo-cortical circuit. Although Parkinson’s disease is characterized by dopamine depletion in the basal ganglia, the dopaminergic basis of resting tremor remains unclear: dopaminergic medication reduces tremor in some patients, but many patients have a dopamine-resistant tremor. Using pharmacological functional magnetic resonance imaging, we test how a dopaminergic intervention influences the cerebral circuit involved in Parkinson’s tremor. From a sample of 40 patients with Parkinson’s disease, we selected 15 patients with a clearly tremor-dominant phenotype. We compared tremor-related activity and effective connectivity (using combined electromyography-functional magnetic resonance imaging) on two occasions: ON and OFF dopaminergic medication. Building on a recently developed cerebral model of Parkinson’s tremor, we tested the effect of dopamine on cerebral activity associated with the onset of tremor episodes (in the basal ganglia) and with tremor amplitude (in the cerebello-thalamo-cortical circuit). Dopaminergic medication reduced clinical resting tremor scores (mean 28%, range −12 to 68%). Furthermore, dopaminergic medication reduced tremor onset-related activity in the globus pallidus and tremor amplitude-related activity in the thalamic ventral intermediate nucleus. Network analyses using dynamic causal modelling showed that dopamine directly increased self-inhibition of the ventral intermediate nucleus, rather than indirectly influencing the cerebello-thalamo-cortical circuit through the basal ganglia. Crucially, the magnitude of thalamic self-inhibition predicted the clinical dopamine response of tremor. Dopamine reduces resting tremor by potentiating inhibitory mechanisms in a cerebellar nucleus of the thalamus (ventral intermediate nucleus). This suggests that altered dopaminergic projections to the cerebello-thalamo-cortical circuit have a role in Parkinson’s tremor.