Dopamine is vital for coordinated motion and for association learning linked to behavioral reinforcement. Here we show that the precise overlap of striatal dopaminergic and cholinergic fibers underlies potent control of dopamine release by ongoing nicotinic receptor activity. In mouse striatal slices, nicotinic antagonists or depletion of endogenous acetylcholine decreased evoked dopamine release by 90%. Nicotine at the concentration experienced by smokers also regulated dopamine release. In mutant mice lacking the beta2 nicotinic subunit, evoked dopamine release was dramatically suppressed, and those mice did not show cholinergic regulation of dopamine release. The results offer new perspectives when considering nicotine addiction and the high prevalence of smoking in schizophrenics.