Prior research has established that stimulating nicotinic acetylcholine receptors can facilitate learning and memory. However, most studies have focused on learning to emit a particular behavior, while little is known about the effects of nicotine on learning to withhold a behavioral response. The present study consisted of a dose response analysis of the effects of nicotine on negative occasion setting, a form of learned inhibition. In this paradigm, rats received one type of training trial in which presentation of a tone by itself was followed immediately by food reward. During the other type of trials, the tone was preceded by presentation of a light and no food was delivered after the tone. Rats gradually learned to approach the cup in anticipation of receiving food reward during presentations of the tone alone, but withheld that behavior when the tone was preceded by the light. Nicotine (0.35mg/kg) facilitated negative occasion setting by reducing the number of sessions needed to learn the discrimination between trial types and by reducing the rate of responding on non-reinforced trials. Nicotine also increased the orienting response to the light, suggesting that nicotine may have affected the ability to withhold food cup behavior on non-reinforced trials by increasing attention to the light. In contrast to the effects of nicotine, rats treated with mecamylamine (0.125, 0.5, or 2 mg/kg) needed more training sessions to discriminate between reinforced and non-reinforced trials compared to saline-treated rats. The findings indicate that nicotinic acetylcholine receptors may be active during negative occasion setting and that nicotine can potentiate learned inhibition.