The smoking rate is high in patients with schizophrenia. Brain stimulation targeting conventional brain circuits associated with nicotine addiction has also yielded mixed results. We aimed to identify alternative circuitries associated with nicotine addiction in both the general population and schizophrenia, and then test whether modulation of such circuitries may alter nicotine addiction behaviors in schizophrenia. In Study I of 40 schizophrenia smokers and 51 non-psychiatric smokers, cross-sectional neuroimaging analysis identified resting state functional connectivity (rsFC) between the dorsomedial prefrontal cortex (dmPFC) and multiple extended amygdala regions to be most robustly associated with nicotine addiction severity in healthy controls and schizophrenia patients (p = 0.006 to 0.07). In Study II with another 30 patient smokers, a proof-of-concept, patient- and rater-blind, randomized, sham-controlled rTMS design was used to test whether targeting the newly identified dmPFC location may causally enhance the rsFC and reduce nicotine addiction in schizophrenia. Although significant interactions were not observed, exploratory analyses showed that this dmPFC-extended amygdala rsFC was enhanced by 4-week active 10Hz rTMS (p = 0.05) compared to baseline; the severity of nicotine addiction showed trends of reduction after 3 and 4 weeks (p ≤ 0.05) of active rTMS compared to sham; Increased rsFC by active rTMS predicted reduction of cigarettes/day (R = -0.56, p = 0.025 uncorrected) and morning smoking severity (R = -0.59, p = 0.016 uncorrected). These results suggest that the dmPFC-extended amygdala circuit may be linked to nicotine addiction in schizophrenia and healthy individuals, and future efforts targeting its underlying pathophysiological mechanisms may yield more effective treatment for nicotine addiction.