Damage to orbitofrontal cortex (OFC) has long been associated with decision-making deficits. Such deficits are epitomized by impairments in reversal learning. Historically, reversal learning deficits have been linked to a response inhibition function or to the rapid reversal of associative encoding in OFC neurons. However here we will suggest that OFC supports reversal learning not because its encoding is particularly flexible-indeed it actually is not-but rather because output from OFC is critical for flexible associative encoding downstream in basolateral amygdala (ABL). Consistent with this argument, we will show that reversal performance is actually inversely related to the flexibility of associative encoding in OFC (i.e., the better the reversal performance, the less flexible the encoding). Further, we will demonstrate that associative correlates in ABL are more flexible during reversal learning than in OFC, become less flexible after damage to OFC, and are required for the expression of the reversal deficit caused by OFC lesions. We will propose that OFC facilitates associative flexibility in downstream regions, such as ABL, for the same reason that it is critical for outcome-guided behavior in a variety of setting-namely that processing in OFC signals the value of expected outcomes. In addition to their role in guiding behavior, these outcome expectancies permit the rapid recognition of unexpected outcomes, thereby driving new learning.