Gamma oscillations have been frequently observed in levodopa-induced dyskinesia (LID), manifest as broadband (60-120 Hz) and narrowband (80-110 Hz) gamma activity in cortico-striatal projection. We investigated the electrophysiological mechanisms and correlation of gamma oscillations with dyskinesia severity, while assessing the administration of fenobam, a selective metabotropic glutamate receptor 5 (mGluR5) antagonist, in regulating dyskinesia-associated gamma activity. We conducted simultaneous electrophysiological recordings in Striatum (Str) and primary motor cortex (M1), together with Abnormal Involuntary Movement Scale scoring (AIMs). Phase-amplitude coupling (PAC), power, coherence, and Granger causality analyses were conducted for electrophysiological data. The findings demonstrated increased beta oscillations with directionality from M1 to Str in parkinsonian state. During on-state dyskinesia, elevated broadband gamma activity was modulated by the phase of theta activity in Str, while M1 → Str gamma causality mediated narrowband gamma oscillations in Str. Striatal gamma power (both periodic and aperiodic power), periodic power, peak frequency, and PAC at 80 min (corresponding to the peak dyskinesia) after repeated levodopa injections across recording days (day 30, 33, 36, 39, and 42) increased progressively, correlating with total AIMs. Additionally, a time-dependent parabolic trend of PAC, peak frequency and gamma power was observed after levodopa injection on day 42 from 20 to 120 min, which also correlated with corresponding AIMs. Fenobam effectively alleviates dyskinesia, suppresses enhanced gamma oscillations in the M1-Str directionality, and reduces PAC in Str. The temporal characteristics of gamma oscillations provide parameters for classifying LID severity. Antagonizing striatal mGluR5, a promising therapeutic target for dyskinesia, exerts its effects by modulating gamma activity.