The dopaminergic system in the brain plays a critical role in nicotine addiction. Genetic variants in the dopaminergic system, including those in dopamine receptor genes, represent plausible candidates for the genetic study of nicotine dependence (ND). We investigated various polymorphisms in the dopamine D(2) receptor gene (DRD2) and its neighboring ankyrin repeats and kinase domain containing 1 gene (ANKK1) to determine whether they were associated with ND. We examined 16 single nucleotide polymorphisms (SNPs) at DRD2 and 7 SNPs at ANKK1 in our Mid-South Tobacco Family cohort, which consisted of 2037 participants representing two distinct American populations. Several SNPs (rs7131056, rs4274224, rs4648318, and rs6278) in DRD2, along with the Taq IA polymorphism (rs1800497) in ANKK1, revealed initial significant associations with ND in European Americans, but not after correction for multiple testing, indicating a weak association of DRD2 with ND. In contrast, associations for ANKK1 with ND in the African-American and pooled samples, specifically for SNP rs2734849, remained significant after correction. With a non-synonymous G to A transition, rs2734849 produces an amino-acid change (arginine to histidine) in C-terminal ankyrin repeat domain of ANKK1. Using the luciferase reporter assay, we further demonstrated that the variant alters expression level of NF-kappaB-regulated genes. Since DRD2 expression is regulated by transcription factor NF-kappaB, we suspect that rs2734849 may indirectly affect dopamine D(2) receptor density. We conclude that ANKK1 is associated with ND and polymorphism rs2734849 in ANKK1 represents a functional causative variant for ND in African-American smokers.