Striatal dopamine (DA) release can be independently triggered not only by action potentials (APs) in dopaminergic axons but also APs in cholinergic interneurons (ChIs). Nicotine causes addiction by modulating DA release, but with paradoxical findings. Here, we investigate how physiologically relevant levels of nicotine modulate striatal DA release. The optogenetic stimulation of ChIs elicits DA release, which is potently inhibited by nicotine with an IC50 of 28 nM in the dorsal striatum slice. This ChI-driven DA release is predominantly mediated by α6β2* nAChRs. Local electrical stimulus (Estim) activates both dopaminergic axons and ChIs. Nicotine does not affect the AP(DA)-dependent DA release (AP(DA), AP of dopaminergic axon). During burst Estim, nicotine permits the facilitation of DA release by prevention of DA depletion. Our work indicates that cholinergic stimulation-induced DA release is profoundly modulated by physiologically relevant levels of nicotine and resolves the paradoxical observation of nicotine's effects on striatal DA release.