Being able to switch from established choices to new alternatives when conditions change – behavioral flexibility – is essential for survival. Cholinergic signaling in the striatum contributes to such flexible behavior, yet the timing and spatial organization of acetylcholine release during contingency changes remain unclear, limiting conceptual understanding of its role in behavioral flexibility. Using a genetically encoded acetylcholine sensor and 2-photon imaging in the dorsal striatum of behaving mice, we visualized acetylcholine dynamics during acquisition and reversal learning in a virtual reality Y-maze. Rewarded outcomes evoked phasic decreases in acetylcholine, whereas unexpected non-reward following reversal triggered widespread increases that predicted lose-shift behavior. Targeted inhibition of cholinergic interneurons reduced this adaptive response. Spatial analysis revealed heterogeneous, temporally distinct signals forming functionally diverse microdomains. These findings suggest that widespread and focal acetylcholine release during unexpected outcomes promotes adaptive response shifts, offering a mechanistic framework for understanding disorders such as addiction and obsessive-compulsive rituals.