Dopamine (DA) neurons of the ventral tegmental area (VTA) integrate cholinergic inputs to regulate key functions such as motivation and goal-directed behaviors. Yet the temporal dynamic range and mechanism of action of acetylcholine (ACh) on the modulation of VTA circuits and reward-related behaviors are not known. Here, we used a chemical-genetic approach for rapid and precise optical manipulation of nicotinic neurotransmission in VTA neurons in living mice. We provide direct evidence that the ACh tone fine-tunes the firing properties of VTA DA neurons through β2-containing (β2*) nicotinic ACh receptors (nAChRs). Furthermore, locally photo-antagonizing these receptors in the VTA was sufficient to reversibly switch nicotine reinforcement on and off. By enabling control of nicotinic transmission in targeted brain circuits, this technology will help unravel the various physiological functions of nAChRs and may assist in the design of novel therapies relevant to neuropsychiatric disorders.