Although chronic nicotine administration does not affect memory, its withdrawal causes massive cognitive deficits. The underlying mechanisms, however, have not been understood. We test the role of cocaine- and amphetamine-regulated transcript peptide (CART), a neuropeptide known for its procognitive properties, in this process. The mice on chronic nicotine treatment/withdrawal were subjected to novel object recognition task. The capability of the animal to discriminate between the novel and familiar objects was tested and represented as discrimination index (DI); reduction in the index suggested amnesia. Nicotine for 49 days had no effect on DI, but 8-hour withdrawal caused a significant reduction, followed by full recovery at 24-hour withdrawal timepoint. Bilateral CART infusion in dorsal hippocampus rescued deficits in DI at 8-hours, whereas CART-antibody infusion into the dorsal hippocampus attenuated the recovery at 24-hours. Commensurate changes were observed in the CART as well as CART mRNA profiles in the hippocampus. CART mRNA expression and the peptide immunoreactivity did not change significantly following chronic nicotine treatment. However, there was a significant reduction at 8-hour withdrawal, followed by a drastic increase in CART immunoreactivity as well as CART mRNA at 24-hour withdrawal, compared with 8-hour withdrawal. Distinct α7-nicotinic receptor immunoreactivity was detected on the hippocampal CART neurons, suggesting cholinergic inputs. An increase in the synaptophysin immunoreactive elements around CART cells in the dentate gyrus, cornu ammonis 3 and subiculum at 24-hour post-withdrawal timepoint suggested neuronal plasticity. CART circuit dynamics in the hippocampus seems to modulate short-term memory associated with nicotine withdrawal.