This study investigated the independent and interactive effects of nicotine dose and nicotine dose expectancy on smoking outcomes using a 2 (given nicotine vs. placebo) × 2 (told nicotine vs. placebo) Balanced Placebo Design (BPD). Smokers (N = 148) completed the Rapid Visual Information Processing Task (RVIP) and measures of smoking urge, mood, and cigarette ratings (e.g., satisfying) after smoking a nicotine or placebo cigarette crossed with instructions that the cigarette contained either nicotine or no nicotine. Nicotine cigarettes (0.6 mg nicotine) produced better sustained attention performance than placebos as indicated by RVIP reaction time, hits, and sensitivity (A'). Nicotine cigarettes also produced better mood and greater rewarding subjective effects of the cigarettes on 11 of 11 dimensions compared to placebos. Nicotine instructions resulted in fewer RVIP false alarms, better mood, and greater rewarding subjective effects of the cigarettes on 9 of 11 dimensions compared to placebo instructions. Nicotine dose by nicotine dose expectancy interactions were also observed for urge and tension-anxiety, such that the dose expectancy manipulation produced differential effects only among those who smoked placebo cigarettes. In contrast a significant interaction for self-reported vigor-activity demonstrated that the dose expectancy manipulation produced effects only among those who smoked nicotine cigarettes. This study provides additional evidence that nicotine improves cognitive performance, and provides initial evidence that denicotinized cigarettes smoked under the guise that they contain nicotine influence cognitive performance, albeit with less robust effects than nicotine. These data may inform the development of expectancy-based interventions for tobacco dependence.