Prediction errors are differences between expected and actual sensory input and are thought to be key computational signals that drive learning related plasticity. One way that prediction errors could drive learning is by activating neuromodulatory systems to gate plasticity. The catecholaminergic locus coeruleus (LC) is a major neuromodulatory system involved in neuronal plasticity in the cortex. Using two-photon calcium imaging in mice exploring a virtual environment, we found that the activity of LC axons in the cortex correlated with the magnitude of unsigned visuomotor prediction errors. LC response profiles were similar in both motor and visual cortical areas, indicating that LC axons broadcast prediction errors throughout the dorsal cortex. While imaging calcium activity in layer 2/3 of the primary visual cortex, we found that optogenetic stimulation of LC axons facilitated learning of a stimulus-specific suppression of visual responses during locomotion. This plasticity – induced by minutes of LC stimulation – recapitulated the effect of visuomotor learning on a scale that is normally observed during visuomotor development across days. We conclude that prediction errors drive LC activity, and that LC activity facilitates sensorimotor plasticity in the cortex, consistent with a role in modulating learning rates.