Nicotine stimulates the activity of mesolimbic dopamine neurons, which is believed to mediate the rewarding and addictive properties of tobacco use. Accumulating evidence suggests that the endocannabinoid system might play a major role in neuronal mechanisms underlying the rewarding properties of drugs of abuse, including nicotine. Here, we investigated the modulation of nicotine effects by the endocannabinoid system on dopamine neurons in the ventral tegmental area with electrophysiological techniques in vivo and in vitro. We discovered that pharmacological inhibition of fatty acid amide hydrolase (FAAH), the enzyme that catabolizes fatty acid ethanolamides, among which the endocannabinoid anandamide (AEA) is the best known, suppressed nicotine-induced excitation of dopamine cells. Importantly, this effect was mimicked by the administration of the FAAH substrates oleoylethanolamide (OEA) and palmitoylethanolamide (PEA), but not methanandamide, the hydrolysis resistant analog of AEA. OEA and PEA are naturally occurring lipid signaling molecules structurally related to AEA, but devoid of affinity for cannabinoid receptors. They blocked the effects of nicotine by activation of the peroxisome proliferator-activated receptor-alpha (PPAR-alpha), a nuclear receptor transcription factor involved in several aspects of lipid metabolism and energy balance. Activation of PPAR-alpha triggered a nongenomic stimulation of tyrosine kinases, which might lead to phosphorylation and negative regulation of neuronal nicotinic acetylcholine receptors. These data indicate for the first time that the anorexic lipids OEA and PEA possess neuromodulatory properties as endogenous ligands of PPAR-alpha in the brain and provide a potential new target for the treatment of nicotine addiction.