Effective evaluation of costs and benefits is a core survival capacity that in humans is considered as optimal, "rational" decision-making. This capacity is vulnerable in neuropsychiatric disorders and in the aftermath of chronic stress, in which aberrant choices and high-risk behaviors occur. We report that chronic stress exposure in rodents produces abnormal evaluation of costs and benefits resembling non-optimal decision-making in which choices of high-cost/high-reward options are sharply increased. Concomitantly, alterations in the task-related spike activity of medial prefrontal neurons correspond with increased activity of their striosome-predominant striatal projection neuron targets and with decreased and delayed striatal fast-firing interneuron activity. These effects of chronic stress on prefronto-striatal circuit dynamics could be blocked or be mimicked by selective optogenetic manipulation of these circuits. We suggest that altered excitation-inhibition dynamics of striosome-based circuit function could be an underlying mechanism by which chronic stress contributes to disorders characterized by aberrant decision-making under conflict. VIDEO ABSTRACT.