The habenula, an ancient small brain area in the epithalamus, densely expresses nicotinic acetylcholine receptors and is critical for nicotine intake and aversion. As such, identification of strategies to manipulate habenular activity may yield approaches to treat nicotine addiction. Here we show that GPR151, an orphan G-protein–coupled receptor (GPCR) highly enriched in the habenula of humans and rodents, is expressed at presynaptic membranes and synaptic vesicles and associates with synaptic components controlling vesicle release and ion transport. Deletion of Gpr151 inhibits evoked neurotransmission but enhances spontaneous miniature synaptic currents and eliminates short-term plasticity induced by nicotine. We find that GPR151 couples to the G-alpha inhibitory protein Gαo1 to reduce cyclic adenosine monophosphate (cAMP) levels in mice and in GPR151-expressing cell lines that are amenable to ligand screens. Gpr151– knockout (KO) mice show diminished behavioral responses to nicotine and self-administer greater quantities of the drug, phenotypes rescued by viral reexpression of Gpr151 in the habenula. These data identify GPR151 as a critical modulator of habenular function that controls nicotine addiction vulnerability.