Nicotinic acetylcholine receptors are ligand-gated ion channels present in muscle and brain. These allosteric oligomers may exist in several conformational states which include a resting state, an open-channel state, and a desensitized refractory state. Recent work has shown that point mutations in the nicotinic receptor may, altogether, abolish desensitization, increase apparent affinity for agonists and convert the effect of a competitive antagonist into an agonist response. These pleiotropic effects are interpreted in terms of the allosteric model. This paper reviews recent evidence that such mutations occur spontaneously in humans and may cause diseases such as congenital myasthenia or familial frontal lobe epilepsy. In addition, nicotinic receptors are involved in tobacco smoking. Accumulating evidence, including experiments with knock-out animals, indicates that addiction to nicotine is linked to the activation of beta 2-subunit containing nicotinic receptors in the dopaminergic mesolimbic neurons which are part of the reward systems in the brain. Current research also indicates that nicotinic agonists might serve as therapeutic agents for Alzheimer's disease and Tourette's syndrome, as well as for schizophrenia. This paper extends and updates a recently published review.