Acoustic prepulse inhibition (PPI) is considered an important biomarker in animal studies of psychosis and a number of psychiatric conditions. Nicotine has been shown to improve acoustic PPI in some animal strains and in humans. However, there is little data on effects of nicotine on acoustic PPI in schizophrenia patients using a double-blind, placebo-controlled study design. The primary aim of the current study was to test the effect of nicotine nasal spray on acoustic PPI in schizophrenia patients. The secondary aim was to test nicotine effect on prepulse facilitation (PPF). The study included 18 schizophrenia patient smokers and 12 healthy control smokers, tested in a double-blind, placebo-controlled, crossover, randomized design immediately after nicotine or saline placebo nasal sprays. PPI was tested using 120 ms prepulse-pulse interval. PPF was tested using 4500 ms prepulse-pulse interval. The results showed a significant main effect of drug on PPI in that nicotine improved PPI compared to placebo (p=0.008) with no drug by diagnosis interaction (p=0.90). Improvement in PPI in response to nicotine was significantly correlated with the baseline severity of clinical symptoms (r=0.59, p=0.02) in patients. There was no significant drug or drug by diagnosis interaction for the 4500 ms prepulse-pulse interval condition. However, nicotine improved inhibition in a subgroup of subjects exhibiting PPF (p=0.002). In conclusion, the findings confirmed that nicotine transiently improves acoustic PPI in schizophrenia patients. Additionally, schizophrenia patients with more clinical symptoms may have benefited more from nicotinic effect on PPI.