Neuronal nicotinic acetylcholine receptors (nAChRs) can regulate the activity of many neurotransmitter pathways throughout the central nervous system and are considered to be important modulators of cognition and emotion. nAChRs are also the primary site of action in the brain for nicotine, the major addictive component of tobacco smoke. nAChRs consist of five membrane-spanning subunits (alpha and beta isoforms) that can associate in various combinations to form functional nAChR ion channels. Owing to a dearth of nAChR subtype-selective ligands, the precise subunit composition of the nAChRs that regulate the rewarding effects of nicotine and the development of nicotine dependence are unknown. The advent of mice with genetic nAChR subunit modifications, however, has provided a useful experimental approach to assess the contribution of individual subunits in vivo. Here, we review data generated from nAChR subunit knockout and genetically modified mice supporting a role for discrete nAChR subunits in nicotine reinforcement and dependence processes. Importantly, the rates of tobacco dependence are far higher in patients suffering from comorbid psychiatric illnesses compared with the general population, which may at least partly reflect disease-associated alterations in nAChR signaling. An understanding of the role of nAChRs in psychiatric disorders associated with high rates of tobacco addiction, therefore, may reveal novel insights into mechanisms of nicotine dependence. Thus, we also briefly review data generated from genetically modified mice to support a role for discrete nAChR subunits in anxiety disorders, depression, and schizophrenia.