Nicotine achieves its psychopharmacological effects by interacting with nicotinic acetylcholine receptors (nAChRs) in the brain. There are numerous subtypes of nAChR that differ in their properties, including their sensitivity to nicotine, permeability to calcium and propensity to desensitise. The nAChRs are differentially localised to different brain regions and are found on presynaptic terminals as well as in somatodendritic regions of neurones. Through their permeability to cations, these ion channel proteins can influence both neuronal excitability and cell signalling mechanisms, and these various responses can contribute to the development or maintenance of dependence. However, many questions and uncertainties remain in our understanding of these events and their relevance to tobacco addiction. In this chapter, we briefly overview the fundamental characteristics of nAChRs that are germane to nicotine's effects and then consider the cellular responses to acute and chronic nicotine, with particular emphasis on dopamine systems because they have been the most widely studied in the context of nicotine dependence. Where appropriate, methodological aspects are critically reviewed.