The prevalence of nicotine dependence is higher than that for any other substance abuse disorder; still, the underlying mechanisms are not fully established. To this end, we studied acute effects by nicotine on neurotransmission in the dorsolateral striatum, a key brain region with respect to the formation of habits. Electrophysiological recordings in acutely isolated brain slices from rodent showed that nicotine (10 nm to 10 μm) produced an LTD of evoked field potentials. Current-clamp recordings revealed no significant effect by nicotine on membrane voltage or action potential frequency, indicating that the effect by nicotine is primarily synaptic. Nicotine did not modulate sIPSCs, or the connectivity between fast-spiking interneurons and medium spiny neurons, as assessed by whole-cell recordings combined with optogenetics. However, the frequency of sEPSCs was significantly depressed by nicotine. The effect by nicotine was mimicked by agonists targeting α7- or α4-containing nAChRs and blocked in slices pretreated with a mixture of antagonists targeting these receptor subtypes. Nicotine-induced LTD was furthermore inhibited by dopamine D2 receptor antagonist and occluded by D2 receptor agonist. In addition, modulation of cholinergic neurotransmission suppressed the responding to nicotine, which might reflect upon the postulated role for nAChRs as a presynaptic filter to differentially govern dopamine release depending on neuronal activity. Nicotine-induced suppression of excitatory inputs onto medium spiny neurons may promote nicotine-induced locomotor stimulation and putatively initiate neuroadaptations that could contribute to the transition toward compulsive drug taking. To decrease smoking, prevalence factors that may contribute to the development of nicotine addiction need to be identified. The data presented here show that nicotine suppresses striatal neurotransmission by selectively reducing the frequency of excitatory inputs to medium spiny neurons (MSNs) while rendering excitability, inhibitory neurotransmission, and fast-spiking interneuron-MSN connectivity unaltered. In addition, we show that the effect displayed by nicotine outlasts the presence of the drug, which could be fundamental for the addictive properties of nicotine. Considering the inhibitory tone displayed by MSNs on dopaminergic cell bodies and local terminals, nicotine-induced long-lasting depression of striatal output could play a role in behavioral transformations associated with nicotine use, and putatively elicit neuroadaptations underlying compulsive drug-seeking habits.