Dopamine is implicated in a diverse range of cognitive functions including cognitive flexibility, task switching, signalling novel or unexpected stimuli as well as advance information. There is also longstanding line of thought that links dopamine with belief formation and, crucially, aberrant belief formation in psychosis. Integrating these strands of evidence would suggest that dopamine plays a central role in belief updating and more specifically in encoding of meaningful information content in observations. The precise nature of this relationship has remained unclear. To directly address this question we developed a paradigm that allowed us to decompose two distinct types of information content, information-theoretic surprise that reflects the unexpectedness of an observation, and epistemic value that induces shifts in beliefs or, more formally, Bayesian surprise. Using functional magnetic-resonance imaging in humans we show that dopamine-rich midbrain regions encode shifts in beliefs whereas surprise is encoded in prefrontal regions, including the pre-supplementary motor area and dorsal cingulate cortex. By linking putative dopaminergic activity to belief updating these data provide a link to false belief formation that characterises hyperdopaminergic states associated with idiopathic and drug induced psychosis.