The initial event in the process by which nicotine acts on the nervous system is its interaction with specific receptor molecules in the neuronal membrane. This interaction can be characterized in radioligand binding assays, using [3H]nicotine. While this approach has generated a detailed description of recognition sites for nicotine in the brain, caution is necessary in correlating these binding proteins with physiologically relevant sites of action of nicotine. Of particular interest is the disparity between effective nicotine concentrations in binding and functional assays, which may reflect receptor desensitization and could be pertinent to the development of dependence. Receptor heterogeneity, reflecting subtypes of nicotine receptor having different radioligand binding specificities and differing properties, introduces a new dimension in the consideration of nicotine's actions. Thus, receptor binding assays have an important role to play, in conjunction with other approaches, in unravelling the complex mechanisms that can lead to nicotine dependence.