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Dopamine signals reward in animal brains. A single presentation of a sugar reward to Drosophila activates distinct subsets of dopamine neurons that independently induce short- and long-term olfactory memories (STM and LTM, respectively). In this study, we show that a recurrent reward circuit underlies the formation and consolidation of LTM. This feedback circuit is composed of a single class of reward-signaling dopamine neurons (PAM-α1) projecting to a restricted region of the mushroom body (MB), and a specific MB output cell type, MBON-α1, whose dendrites arborize that same MB compartment. Both MBON-α1 and PAM-α1 neurons are required during the acquisition and consolidation of appetitive LTM. MBON-α1 additionally mediates the retrieval of LTM, which is dependent on the dopamine receptor signaling in the MB α/β neurons. Our results suggest that a reward signal transforms a nascent memory trace into a stable LTM using a feedback circuit at the cost of memory specificity.