Dopaminergic projections from the ventral tegmental area (VTA) to the nucleus accumbens (NAcc) mediate the behavioral and motivational effects of many drugs of abuse, including nicotine. Repeated intermittent administration of these drugs, a pattern often associated with initial drug exposure, sensitises the reactivity of dopamine (DA) neurons in this pathway, enhances the locomotor behaviors the drugs emit, and promotes their pursuit and self-administration. Here we show that activation of nicotinic acetylcholine receptors (nAChRs) in the VTA, but not the NAcc, is essential for the induction of locomotor sensitisation by nicotine. Repeated intermittent nicotine exposure (4 × 0.4 mg/kg, base, i.p., administered over 7 days), a regimen leading to long-lasting locomotor sensitisation, also produced upregulation of nAChRs in the VTA, but not the NAcc, in the hours following the last exposure injection. Functional nAChR upregulation was observed selectively in DA but not GABA neurons in the VTA. These effects were followed by long-term potentiation of excitatory inputs to these cells and increased nicotine-evoked DA overflow in the NAcc. Withdrawal symptoms were not observed following this exposure regimen. Thus, intermittent activation and upregulation by nicotine of nAChRs in DA neurons in the VTA may contribute to the development of behavioral sensitisation and increased liability for nicotine addiction.