Task-switching is a fundamental cognitive ability which requires animals to update their knowledge of current rules, allowing flexible behaviour in a changing environment. This is often achieved through evaluating discrepancies between observed and expected events. The anterior cingulate cortex (ACC) has a key role in processing such discrepancies, or prediction errors. However, the neural circuit mechanisms underlying task-switching are largely unknown. Here we show that activity in the ACC induced by the absence of expected stimuli is necessary for rapid task-switching. Mice trained to perform a block-wise set-shifting task typically required a single experience of an expectation violation, or prediction error to accurately switch between responding to the same stimuli using distinct rules. Neurons in the ACC explicitly represented these prediction errors, and their activity was predictive of successful one-shot behavioural transitions. Prediction error signals were projection target-specific, constrained in their spatio-temporal spread across cortex, and heavily disrupted by VIP interneuron perturbation. Optogenetic silencing and single-trial un-silencing revealed that the requirement of the ACC in task-switching was restricted to the epochs when neural prediction error signals were observed. These results reveal a dedicated circuitry promoting the transition between distinct cognitive states ### Competing Interest Statement The authors have declared no competing interest.