This chapter reviews the role of the basal ganglia (BG) in habit formation and skill learning. The associative BG network contributes to initial learning of the action–outcome contingency, but with extended training, behavior can become more habitual and no longer driven by representation of the final outcome. The sensorimotor BG network, especially corticostriatal projections to the dorsolateral striatum, is critical for habit formation. In both habit formation and skill learning and development of behavioral automaticity, there is reduced attentional demand and increased effector specificity, long-term synaptic plasticity at corticostriatal synapses, and a shift in the lead cortico-BG network mediating performance from the associative to the sensorimotor network. But skill learning requires learning internal templates of reference signals for precise online control, and a detailed specification of action parameters like movement velocity and amplitude. It is hypothesized that such a shift reflects a shift from a higher level in the motivational hierarchy to a lower level. Each level is associated with distinct types of feedback and control distinct variables.