Use of tobacco products contributes to hundreds of thousands of premature deaths and untold millions of dollars in health care costs in this country each year. Nicotine is the principal neuroactive component in tobacco, but, despite ongoing research efforts, the cellular basis of its effects on behavior remains unclear. Efforts to resolve this conundrum have focused on the mesoaccumbens dopamine system, which contributes to the rewarding effects of many addictive drugs, including nicotine. The goal of this review is to outline recent advances and highlight some of the important unanswered questions regarding nicotine's effects on neuronal excitability and synaptic plasticity within the brain reward pathways.