When learning to find the most beneficial course of action, the prefrontal cortex guides decisions by comparing estimates of the relative value of the options available. Basic neuroscience studies in animals support the view that the thalamus can regulate the activity within and across the prefrontal cortex. However, it is unknown if it can modify value-based decision making in humans. Understanding this is clinically important because disorders of value-based decision making underpin common motivational syndromes of apathy and impulsivity. Neuromodulation of the thalamus is routinely performed for motor symptoms and therefore could be a viable future target for these neuropsychiatric complications of neurodegenerative disease. Here, a group of patients (n=37) undergoing MR guided focused ultrasound for essential tremor, were tested using the restless bandit, a reward reinforcement learning task, immediately before and after thalamotomy. Performance was compared to a group of age- and gender-matched healthy controls (n = 32). Thalamotomy significantly impaired the proportion of switch choices during the task (P<0.001) without affecting overall performance. Importantly, this reduction in choice flexibility could not be attributed to diminished attention, as thalamotomy did not affect response time, accuracy, or lateralisation. A reinforcement learning model fitted to the patients\' choices replicated the effect of thalamotomy when the model increased exploitation of the bandits\' learnt value estimate. This shift in the explore-exploit trade-off, manifesting as reduced choice flexibility, co-varied with the extent of post-operative oedema extension into mediodorsal nucleus (R= 0.64, p<0.001), but no other, including the Ventral intermediate nucleus, targeted clinically during MRgFUS thalamotomy for tremor control. Furthermore, using a normative functional connectome, resting-state fMRI connectivity between the volume of oedema encroaching the mediodorsal nucleus and the prefrontal cortex, predicted individual patients change in bandit performance. Lastly, we used probabilistic tractography to confirm a thalamo-cortical circuit between the lateral portion of mediodorsal nucleus and the frontal polar cortex, which regulates decision flexibility and accounts for the thalamotomy induced behavioural effect observed in the restless bandit task. These findings confirm a causal role of the thalamus and specifically the mediodorsal nucleus, in regulating the extent to which value estimates are used to guide decisions and learning from reward. Neuromodulation of this target would be worthy of further investigation in patients with diminished motivation characteristic of apathy in conditions including Parkinson\'s disease.