Catecholamine signaling is thought to modulate cognition in an inverted-U relationship, but the mechanisms are unclear. We measured norepinephrine and dopamine release, postsynaptic calcium responses, and interactions between tonic and phasic firing modes under various stimuli and conditions. High tonic activity in vivo depleted catecholamine stores, desensitized postsynaptic responses, and decreased phasic transmission. Together this provides a clearer understanding of the inverted-U relationship, offering insights into psychiatric disorders and neurodegenerative diseases with impaired catecholamine signaling.