Nicotinic acetylcholine receptors (nAChRs) are widely expressed in the mammalian central nervous system (CNS). Despite this, very little was known, until recently, about their physiological role. In the periphery, nicotinic receptors mediate vital excitatory fast synaptic cholinergic transmission at both the neuromuscular junction and ganglia. In the brain, this role has been mainly “delegated” to glutamate receptors. The very broad cholinergic innervations of most brain areas, including the cortex, have implicated this system, and brain nicotinic receptors in particular, in a unique “modulatory” role of other transmitters systems. Recent evidence confirms, on one hand, that brain nicotinic receptors have a dominant “presynaptic” modulatory function, controlling the release of both acetylcholine (auto-receptors) and other neurotransmitters (hetero-receptors). On the other hand, more experimental data support the idea that a variable component of fast synaptic transmission in the brain can also be mediated by “postynaptic” nicotinic receptors, which, in turn, can control cell excitability. A challenging goal is to identify which one of the plethora of nicotinic receptor subtypes is mediating each effect in different brain areas, and which of these receptors and functions are lost or affected in different human neuro-psychiatric disorders. Needless to say, a better understanding of the physiological role of brain nicotinic receptors will drive our quest for more selective and efficacious nicotinic receptor targeted therapeutic agents.