A. In the absence of nicotine, the endogenous neurotransmitter acetylcholine (ACh) is released in the ventral tegmental area (VTA) from terminals of cholinergic brainstem nuclei including the pedunculopontine tegmental area (Lança et al., 2000). The mixed cholinergic stimulation of glutamatergic (Glu) and GABAergic (GABA) terminals in the VTA supports both tonic and phasic activity of dopaminergic (DA) neurons (Grenhoff and Svensson, 1992). In addition, cholinergic interneurons release ACh onto the terminals of dopaminergic neurons (DA) in the nucleus accumbens (NAc) (Zhou et al., 2001). At baseline, ACh in the striatum allows tonic firing of DA neurons to result in significant DA release (Rice and Cragg, 2004; Zhang and Sulzer, 2004). B. The effect of nicotine in the VTA is initially to increase the firing rate of DA neurons (Grenhoff et al., 1986; Picciotto et al., 1998). The increase in firing rate of VTA neurons involves glutamate release (Grillner and Svensson, 2000; Schilstrom et al., 1998), and the nicotine-mediated increase in glutamate release does not desensitize during continuous administration of nicotine (Mansvelder et al., 2002; Wooltorton et al., 2003). By contrast, the ability of nicotine to increase GABA release in the VTA undergoes rapid desensitization (Mansvelder et al., 2002; Wooltorton et al., 2003). In the NAc, nicotine initially increases release of DA from terminals, but these nAChRs undergo rapid desensitization (Grady et al., 1994; Rowell and Hillebrand, 1994). Desensitization of these nAChRs decreases the ability of tonic firing to release DA in the NAc, but maintains the effect of phasic firing on DA release, thereby acting as a high pass filter for events increasing phasic firing (Rice and Cragg, 2004; Zhang and Sulzer, 2004). Thus, nicotine acts in the VTA to increase phasic firing, and in the NAc to increase the salience of that increase in phasic firing.