Increases in dopamine D2 receptor sensitivity are known to be common in drug abuse and neurological disorders. Past data from this laboratory have shown that long-term increases in D2 sensitivity can be produced by quinpirole treatment (a D2/D3 agonist) during early development. The present investigation was designed to test the hypothesis that nicotine administration in adulthood would reduce both cognitive and skilled reaching impairments produced by increases in D2 sensitivity. Female Sprague–Dawley rats were treated with quinpirole (1 mg/kg) or saline from postnatal day 1 (PD 1) to PD 21. Beginning in adulthood (PD 61), rats were treated with nicotine (0.3 mg/kg free base) or saline twice daily for 14 consecutive days before behavioural testing commenced. Animals neonatally treated with quinpirole demonstrated performance deficits on the Morris water task and a skilled reaching task compared to controls. Deficits on both tasks were completely alleviated by adulthood nicotine treatment. Animals neonatally treated with quinpirole demonstrated a significant 36% decrease of ChAT in the hippocampus compared to saline controls that was partially eliminated by nicotine. Additionally, neonatal quinpirole produced a significant decrease in hippocampal NGF content compared to controls, however, nicotine failed to alleviate this decrease in NGF. The results of this investigation demonstrate that long-term increases in dopamine D2 receptor sensitivity produce significant decreases in hippocampal cholinergic and NGF expression that may result in cognitive impairment. Nicotine alleviates both cognitive and skilled reaching impairments caused by increases in D2 sensitivity, but the mechanism through which nicotine is acting is currently unknown.