Nicotine is the main chemical component in tobacco products and its effect on bone healing remains controversial. This study aims to evaluate the influence of nicotine on blood perfusion and bone healing using a rabbit model of mandibular distraction osteogenesis. The dose dependent effect of nicotine on bone regeneration, and the effect of nicotine on blood perfusion and angiogenesis were assessed by radiography, micro-computed tomography, histological and immunohistochemical analysis, real time PCR and Laser Doppler monitoring. Results showed that bone healing was compromised by high dose nicotine treatment. Nicotine exposure increased microvessel density, whereas inhibited blood flow and bone formation. The expression of bone morphogenetic protein (BMP)-2 in osteoblasts was also decreased. The present study supported that nicotine has a dose dependant influence on bone healing in distraction osteogenesis. Nicotine compromises bone regeneration possibly by causing ischemia and inhibiting BMP expression in osteoblasts. Nicotine exposure enhances angiogenesis but can not compensate for the adverse effect of vasoconstriction.