We have combined anatomical and functional methodologies to provide a comprehensive analysis of the properties of nicotinic acetylcholine receptors (nAChRs) on developing dopamine (DA) neurons of Sprague-Dawley rats. Double-labeling in situ hybridization was used to examine the expression of nAChR subunit mRNAs within developing midbrain DA neurons. As brain maturation progressed there was a change in the pattern of subunit mRNA expression within DA neurons, such that alpha3 and alpha4 subunits declined and alpha6 mRNA increased. Although there were strong similarities in subunit mRNA expression in substantia nigra (SNc) and ventral tegmental area (VTA), there was higher expression of alpha4 mRNA in SNc than VTA at gestational day (G) 15, and of alpha5, alpha6 and beta3 mRNAs during postnatal development. Using a superfusion neurotransmitter release paradigm to functionally characterize nicotine-stimulated release of [(3)H]DA from striatal slices, the properties of the nAChRs on DA terminals were also found to change with age. Functional nAChRs were detected on striatal terminals at G18. There was a decrease in maximal release in the first postnatal week, followed by an increase in nicotine efficacy and potency during the second and third postnatal weeks. In the transition from adolescence (postnatal days (P) 30 and 40) to adulthood, there was a complex pattern of functional maturation of nAChRs in ventral, but not dorsal, striatum. In males, but not females, there were significant changes in both nicotine potency and efficacy during this developmental period. These findings suggest that nAChRs may play critical functional roles throughout DA neuronal maturation.