Understanding the basic and clinical pharmacology of nicotine provides a basis for improved prevention and treatment of tobacco addiction. Nicotine acts on nicotinic cholinergic receptors in the brain to release dopamine and other neurotransmitters that sustain addiction. Neuroadaptation and tolerance involve changes in both nicotinic receptors and neural plasticity. Nicotine addiction can occur in the context of physical dependence characterized by self-medication to modulate negative affect and/or to relieve withdrawal symptoms, as well as, in light or occasional smokers, primarily for positive reinforcement in specific situations. Nicotine is metabolized primarily by CYP2A6. Its clearance exhibits considerable individual variability that is determined by genetic, racial, and hormonal (sex) factors. Genetically slow metabolism of nicotine appears to be associated with a lower level of dependence. Nicotine dependence is highly heritable and appears to be influenced by genes coding for some nicotine receptor subtypes, some neurotransmitter genes, and genes involved in neural connectivity. Novel pharmacotherapies for nicotine dependence include partial agonists for nicotinic receptors and nicotine vaccines. Pharmacogenetic studies suggest various candidate genes and a nicotine metabolism phenotype that influence outcome. Human pharmacology studies of nicotine and smoking behavior also provide a basis for assessing the benefits and risks of long-term nicotine use for harm reduction and for a potential cigarette regulatory strategy that includes reducing nicotine content of cigarettes to nonaddictive levels.