Abstract Despite a theory that an imbalance in goal-directed versus habitual systems serve as building blocks of compulsions, research has yet to delineate how this occurs during arbitration between the two systems in obsessive-compulsive disorder. Inspired by a brain model in which the inferior frontal cortex selectively gates the putamen to guide goal-directed or habitual actions, this study aimed to examine whether disruptions in the arbitration process via the fronto-striatal circuit would underlie imbalanced decision-making and compulsions in patients. Thirty patients with obsessive-compulsive disorder [mean (standard deviation) age = 26.93 (6.23) years, 12 females (40%)] and 30 healthy controls [mean (standard deviation) age = 24.97 (4.72) years, 17 females (57%)] underwent functional MRI scans while performing the two-step Markov decision task, which was designed to dissociate goal-directed behaviour from habitual behaviour. We employed a neurocomputational model to account for an uncertainty-based arbitration process, in which a prefrontal arbitrator (i.e. inferior frontal gyrus) allocates behavioural control to a more reliable strategy by selectively gating the putamen. We analysed group differences in the neural estimates of uncertainty of each strategy. We also compared the psychophysiological interaction effects of system preference (goal-directed versus habitual) on fronto-striatal coupling between groups. We examined the correlation between compulsivity score and the neural activity and connectivity involved in the arbitration process. The computational model captured the subjects’ preferences between the strategies. Compared with healthy controls, patients had a stronger preference for the habitual system (t = −2.88, P = 0.006), which was attributed to a more uncertain goal-directed system (t = 2.72, P = 0.009). Before the allocation of controls, patients exhibited hypoactivity in the inferior frontal gyrus compared with healthy controls when this region tracked the inverse of uncertainty (i.e. reliability) of goal-directed behaviour (P = 0.001, family-wise error rate corrected). When reorienting behaviours to reach specific goals, patients exhibited weaker right ipsilateral ventrolateral prefronto-putamen coupling than healthy controls (P = 0.001, family-wise error rate corrected). This hypoconnectivity was correlated with more severe compulsivity (r = −0.57, P = 0.002). Our findings suggest that the attenuated top-down control of the putamen by the prefrontal arbitrator underlies compulsivity in obsessive-compulsive disorder. Enhancing fronto-striatal connectivity may be a potential neurotherapeutic approach for compulsivity and adaptive decision-making.