Nicotine has been shown to produce some beneficial effects in neurodegenerative disorders, and several studies have suggested that these effects may be mediated in part through the action of the neurotrophic factor BDNF. To further elucidate the interaction between nicotine and BDNF, we examined the effect of nicotine on the proliferation of the neuroblastoma cell line SH-SY5Y, which, following differentiation with retinoic acid, expresses both nicotinic receptors and the receptor for BDNF, TrkB. Both nicotine and the nicotinic alpha-7 selective agonist AR-17779 significantly increased cell proliferation albeit with bell-shaped dose-response kinetics. The blockade of this effect with either the alpha-7 nicotinic antagonist methyllycaconitine or the non-selective nicotinic antagonist mecamylamine indicated that the effect was mediated by nicotinic receptors. Prior addition of neutralising BDNF antibodies or of the tyrosine kinase inhibitor K252A (200 nM) completely blocked nicotine-induced proliferation, suggesting the involvement of TrkB signalling in the mediation of the effect. Nicotine also enhanced both the secretion of BDNF from the SH-SY5Y and cell surface density of TrkB receptors. These effects were abolished by pretreatment with MLA. These data indicate that activation of nicotinic receptors has effects upon the BDNF-TrkB pathway, inducing cell proliferation by promoting the release of BDNF, which in turn activates TrkB receptors.