Previous studies indicate a role of dopamine in spatial navigation. Although neural representations of direction are an important aspect of spatial cognition, it is not well understood whether dopamine directly affects these representations, or only impacts other aspects of spatial brain function. Moreover, both dopamine and spatial cognition decline sharply during age, raising the question which effect dopamine has on directional signals in the brain of older adults. To investigate these questions, we used a double-blind cross-over L-DOPA/Placebo intervention design in which 43 younger and 37 older adults navigated in a virtual spatial environment while undergoing functional magnetic resonance imaging (fMRI). We studied the effect of L-DOPA, a dopamine precursor, on fMRI activation patterns that encode spatial walking directions that have previously been shown to lose specificity with age. This was done in predefined regions of interest, including the early visual cortex, retrosplenial cortex, and hippocampus. Classification of brain activation patterns associated with different walking directions was improved across all regions following L-DOPA administration, suggesting that dopamine broadly enhances neural representations of direction. No evidence for differences between regions was found. In the hippocampus these results were found in both age groups, while in the retrosplenial cortex they were only observed in younger adults. Taken together, our study provides evidence for a link between dopamine and the specificity of neural responses during spatial navigation. SIGNIFICANCE STATEMENT: The sense of direction is an important aspect of spatial navigation, and neural representations of direction can be found throughout a large network of space-related brain regions. But what influences how well these representations track someone's true direction? Using a double-blind cross-over L-DOPA/Placebo intervention design, we find causal evidence that the neurotransmitter dopamine impacts the fidelity of direction selective neural representations in the human hippocampus and retrosplenial cortex. Interestingly, the effect of L-DOPA was either equally present or even smaller in older adults, despite the well-known age related decline of dopamine. These results provide novel insights into how dopamine shapes the neural representations that underlie spatial navigation.