Repeated nicotine administration induces tyrosine hydroxylase (TH) mRNA in rat midbrain. In this study we investigate the mechanisms responsible for this response using two models of midbrain dopamine neurons, rat ventral midbrain slice explant cultures and mouse MN9D cells. In both models nicotine stimulates TH gene transcription rate in a dose-dependent manner. However, this stimulation is short-lived, lasting for 1 h, but less than 3 h, and is not sufficient to induce TH mRNA or TH protein. Nicotine elevates circulating glucocorticoids, which induce TH expression in some model systems. We tested the hypothesis that the effect of nicotine on midbrain TH mRNA is mediated by the glucocorticoid receptor. When rats are administered the glucocorticoid receptor antagonist mifepristone, the induction of TH mRNA by nicotine in both substantia nigra and ventral tegmentum is inhibited. Furthermore, the glucocorticoid receptor agonist dexamethasone stimulates TH gene transcription for sustained periods of time in both midbrain slices and MN9D cells, leading to induction of TH mRNA and TH protein. Our results are consistent with the hypothesis that nicotine induces TH mRNA in midbrain by elevating glucocorticoids, which then act on glucocorticoid receptors in dopamine neurons leading to transcriptional activation of the TH gene.