The lateral habenula (LHb) is thought to provide an aversive or anti-reward signal in the mammalian brain under Pavlovian conditions. However, recent evidence suggests that the LHb also controls more complex decision-making during appetitive behaviors, since LHb disruption impairs hippocampal (HPC)-dependent memory. This study tested whether LHb’s role in appetitive behaviors is at least in part due to its integration of internal state information and limbic cortical information to enable flexible responding that reflects the most beneficial choice under changing task conditions. Since delay-discounting performance relies on an analysis of subjective values of reward (i.e. a cost-benefit interpretation) to determine choice preferences as task conditions change, the current study tested rats’ performance on a maze-based delay-discounting task. Male and female Long-Evans rats were trained to make choices between two options on an elevated T-Maze: a short delay (3 sec) followed by delivery of a small reward (1 sugar pellet), or longer delays (10, 20, or 40 sec) followed by a large reward (4 sugar pellets). Rats showed the typical delay-discounting function that illustrated their strong preference for the large reward option after the 10 sec delay, but a significantly reduced preference for the large reward option after a 20 or 40 sec delay. Muscimol, (MUS, a GABAA receptor agonist) microinfusion into the LHb eliminated delay-discounting behavior such that LHb inactivated rats showed no preference for the large reward at any delay interval (< .01). There were no sex differences in the LHb effect, and whether the rat received left or right arm as the large reward arm were counterbalanced across animals. Similar elimination of delay-discounting behavior was found after hippocampal inactivation. The employed reward magnitude discrimination task further indicated that, MUS inactivation did not impair animal’s ability to distinguish between a small reward and a large reward with equal delay (3 sec). Confirming that LHb is functioning in a higher order flexible responding process, our results reveal that the LHb plays a necessary role in discounting behaviors since rats exhibited chance performance when choosing between a sooner-smaller reward and a later-larger reward regardless of the delay between choice and reward acquisition. Further, these data show that the LHb is critically important in a hippocampal-dependent appetitive task. Although there are no known anatomical connections between LHb and hippocampus, these results are consistent with our hypothesis that these brain areas are functionally connected to enable animals to flexibly respond in adaptive ways.