Tobacco smoking is an extremely addictive and harmful form of nicotine (NIC) consumption, but unfortunately also the most prevalent. Although disproportionately high frequencies of smoking and its health consequences among psychiatric patients are widely known, the neurobiological background of this epidemiological association is still obscure. The diverse neuroactive effects of NIC and some other major tobacco smoke constituents in the central nervous system may underlie this association. This present paper summarizes the pharmacology of NIC and its receptors (nAChR) based on a systematic review of the literature. The role of the brain's reward system(s) in NIC addiction and the results of functional and structural neuroimaging studies on smoking-related states and behaviors (i.e. dependence, craving, withdrawal) are also discussed. In addition, the epidemiological, neurobiological, and genetic aspects of smoking in several specific neuropsychiatric disorders are reviewed and the clinical relevance of smoking in these disease states addressed.