Obsessive-Compulsive Disorder (OCD), characterized by intrusive thoughts (obsessions) and repetitive behaviors (compulsions), is associated with dysfunction in fronto-striatal circuits. There are currently no fast-acting pharmacological treatments for OCD. However, recent clinical studies demonstrated that an intravenous infusion of ketamine rapidly reduces OCD symptoms. To probe mechanisms underlying ketamine's therapeutic effect on OCD-like behaviors, we used the SAPAP3 knockout (KO) mouse model of compulsive grooming. Here we recapitulate the fast-acting therapeutic effect of ketamine on compulsive behavior, and show that ketamine increases activity of dorsomedial prefrontal neurons projecting to the dorsomedial striatum in KO mice. Optogenetically mimicking this increase in fronto-striatal activity reduced compulsive grooming behavior in KO mice. Conversely, inhibiting this circuit in wild-type mice increased grooming. Finally, we demonstrate that ketamine blocks the exacerbation of grooming in KO mice caused by optogenetically inhibiting fronto-striatal activity. These studies demonstrate that ketamine increases activity in a fronto-striatal circuit that causally controls compulsive grooming behavior, suggesting this circuit may be important for ketamine's therapeutic effects in OCD.