Recent studies have shown that nicotine, a component of cigarette smoke, can stimulate the proliferation of non-neuronal cells. While nicotine is not carcinogenic by itself, it has been shown to induce cell proliferation and angiogenesis. Here we find that mitogenic effects of nicotine in non-small cell lung cancers (NSCLCs) are analogous to those of growth factors and involve activation of Src, induction of Rb-Raf-1 interaction, and phosphorylation of Rb. Analysis of human NSCLC tumors show enhanced levels of Rb-Raf-1 complexes compared with adjacent normal tissue. The mitogenic effects of nicotine were mediated via the alpha7-nAChR subunit and resulted in enhanced recruitment of E2F1 and Raf-1 on proliferative promoters in NSCLC cell lines and human lung tumors. Nicotine stimulation of NSCLC cells caused dissociation of Rb from these promoters. Proliferative signaling via nicotinic acetylcholine receptors (nAChRs) required the scaffolding protein beta-arrestin; ablation of beta-arrestin or disruption of the Rb-Raf-1 interaction blocked nicotine-induced proliferation of NSCLCs. Additionally, suppression of beta-arrestin also blocked activation of Src, suppressed levels of phosphorylated ERK, and abrogated Rb-Raf-1 binding in response to nicotine. It appears that nicotine induces cell proliferation by beta-arrestin-mediated activation of the Src and Rb-Raf-1 pathways.