Diminished gating of the P50 auditory evoked response to repeated stimuli is a psychophysiological feature of schizophrenia, that is also present in many relatives of patients. Animal models of auditory sensory gating indicate that nicotinic cholinergic neurotransmission is a critical neuronal substrate. The aim of this experiment was to determine if the deficit in sensory gating could be reversed by nicotine administration. Nonsmoking relatives of schizophrenics with abnormal sensory gating were selected as subjects for this initial double-blind trial, to avoid effects of psychotropic medications that might complicate trials in schizophrenic patients themselves. Nicotine-containing gum increased P50 sensory gating to near normal levels within 30 min of administration. The effect was transient; the gating of P50 returned to baseline levels within 1 hr. There was no change observed after placebo administration. In one of the subjects, the anticholinesterase inhibitor physostigmine similarly normalized P50 gating. The results are consistent with the hypothesis that nicotinic cholinergic neurotransmission may mediate a familial psychophysiological deficit in schizophrenia.