Substantial evidence demonstrates both nicotine's addiction liability and its cognition-enhancing effects. However, the neurobiological mechanisms underlying nicotine's impact on brain function and behavior remain incompletely understood. Elucidation of these mechanisms is of high clinical importance and may lead to improved therapeutics for smoking cessation as well as for a number of cognitive disorders such as schizophrenia. Neuroimaging techniques such as positron emission tomography (PET), single photon emission computed tomography (SPECT), and functional magnetic resonance imaging (fMRI), which make it possible to study the actions of nicotine in the human brain in vivo, play an increasingly important role in identifying these dual mechanisms of action. In this review, we summarize the current state of knowledge and discuss outstanding questions and future directions in human neuroimaging research on nicotine and tobacco. This research spans from receptor-level PET and SPECT studies demonstrating nicotine occupancy at nicotinic acetylcholine receptors (nAChRs) and upregulation of nAChRs induced by chronic smoking; through nicotine's interactions with the mesocorticolimbic dopamine system believed to mediate nicotine's reinforcing effects leading to dependence; to functional activity and connectivity fMRI studies documenting nicotine's complex behavioral and cognitive effects manifest by its actions on large-scale brain networks engaged both during task performance and at rest. This article is part of the Special Issue Section entitled 'Neuroimaging in Neuropharmacology'.