Age-related alterations in cortico-striatal function have been highlighted as an important determinant of declines in flexible, higher-order, cognition in older age. However, the mechanisms underlying such alterations remain poorly understood. Computational accounts propose age-related dopaminergic decreases to impoverish neural gain control, possibly contributing to reduced specificity of cortico-striatal circuits, that are modulated by dopamine, in older age. Using multi-modal neuroimaging data (fMRI, PET) from a large lifespan cohort (n = 180), we assessed the relationship between dopamine D1-like receptors (D1DRs) and cortico-striatal function during rest and an n-back working memory task. The results revealed gradual age-related decreases in the specificity of functional coupling between the centrolateral caudate and cortical association networks during both rest and working memory, which, in turn, was associated with poorer short- and long-term memory performance with older age. Critically, reduced D1DR availability in the caudate and the prefrontal cortex predicted less differentiated caudate-cortical coupling across the lifespan, in part accounting for the age-related declines observed on this metric. These findings provide novel empirical evidence for a key role of dopamine in maintaining functional specialization of cortico-striatal circuits as individuals age, bridging with computational models of deficient catecholaminergic neuromodulation underpinning age-related dedifferentiation of brain function.