Peptic ulcer is a common disorder of gastrointestinal system and its pathogenesis is multifactorial, where smoking and nicotine have significant adverse effects. Smoking and chronic nicotine treatment stimulate basal acid output which is more pronounced in the smokers having duodenal ulcer. This increased gastric acid secretion is mediated through the stimulation of H2-receptor by histamine released after mast cell degranulation and due to the increase of the functional parietal cell volume or secretory capacity in smokers. Smoking and nicotine stimulate pepsinogen secretion also by increasing chief cell number or with an enhancement of their secretory capacity. Long-term nicotine treatment in rats also significantly decreases total mucus neck cell population and neck-cell mucus volume. Smoking also increases bile salt reflux rate and gastric bile salt concentration thereby increasing duodenogastric reflux that raises the risk of gastric ulcer in smokers. Smoking and nicotine not only induce ulceration, but they also potentiate ulceration caused by H. pylori, alcohol, nonsteroidal anti-inflammatory drugs or cold restrain stress. Polymorphonuclear neutrophils (PMN) play an important role in ulcerogenesis through oxidative damage of the mucosa by increasing the generation of reactive oxygen intermediates (ROI), which is potentiated by nicotine and smoking. Nicotine by a cAMP-protein kinase A signaling system elevates the endogenous vasopressin level, which plays an aggressive role in the development of gastroduodenal lesions. Smoking increases production of platelet activating factor (PAF) and endothelin, which are potent gastric ulcerogens. Cigarette smoking and nicotine reduce the level of circulating epidermal growth factor (EGF) and decrease the secretion of EGF from the salivary gland, which are necessary for gastric mucosal cell renewal. Nicotine also decreases prostaglandin generation in the gastric mucosa of smokers, thereby making the mucosa susceptible to ulceration. ROI generation and ROI-mediated gastric mucosal cell apoptosis are also considered to be important mechanism for aggravation of ulcer by cigarette smoke or nicotine. Both smoking and nicotine reduce angiogenesis in the gastric mucosa through inhibition of nitric oxide synthesis thereby arresting cell renewal process. Smoking or smoke extract impairs both spontaneous and drug-induced healing of ulcer. Smoke extract also inhibits gastric mucosal cell proliferation by reducing ornithine decarboxylase activity, which synthesises growth-promoting polyamines. It is concluded that gastric mucosal integrity is maintained by an interplay of some aggressive and defensive factors controlling apoptotic cell death and cell proliferation and smoking potentiates ulcer by disturbing this balance.