A high rate of heavy tobacco smoking among people with schizophrenia has been suggested to reflect self-medication and amelioration of cognitive dysfunction, a core feature of schizophrenia. NMDAR hypofunction is hypothesized to be a mechanism of cognitive dysfunction, and excessive schizophrenia-linked neuregulin 1 (NRG1) signaling through its receptor ErbB4 can suppress NMDAR function by preventing Src-mediated enhancement of NMDAR responses. Here we investigated whether chronic nicotine exposure in rats by subcutaneous injection of nicotine (0.5–1 mg/kg, twice daily for 10–15 days) counteracts the suppressive effect of NRG1β on NMDAR-mediated responses recorded from CA1 pyramidal cells in acute hippocampal slices. We found that NRG1β, which prevents the enhancement of NMDAR responses by the Src-family-kinase-activating peptide pYEEI in naive rats, failed to block the effect of pYEEI in nicotine-exposed rats. In naive rats, NRG1β acts only on GluN2B-NMDARs by blocking their Src-mediated upregulation. Chronic nicotine exposure causes enhanced GluN2B-NMDAR responses via Src upregulation and recruits Fyn for the enhancement of GluN2A-NMDAR responses. NRG1β has no effect on both enhanced basal GluN2B-NMDAR responses and Fyn-mediated enhancement of GluN2A-NMDAR responses. Src-mediated enhancement of GluN2B-NMDAR responses and Fyn-mediated enhancement of GluN2A-NMDAR responses initiate long-term potentiation (LTP) of AMPAR synaptic responses in naive and nicotine-exposed CA1 pyramidal cells, respectively. These results suggest that NRG1β suppresses LTP by blocking Src-mediated enhancement of GluN2B-NMDAR responses, but has no effect on LTP in nicotine-exposed rats. These effects of chronic nicotine exposure may counteract the negative effect of increased NRG1-ErbB4 signaling on the cellular mechanisms of learning and memory in individuals with schizophrenia, and therefore may motivate heavy smoking.