In the developing brain, nicotinic acetylcholine receptors (nAChRs) are involved in cell survival, targeting, formation of neural and sensory circuits, and development and maturation of other neurotransmitter systems. This regulatory role is disrupted when the developing brain is exposed to nicotine, which occurs with tobacco use during pregnancy. Prenatal nicotine exposure has been shown to be a strong risk factor for memory deficits and other behavioral aberrations in the offspring. The molecular mechanisms underlying these neurobehavioral outcomes are not clearly elucidated. We used a rodent model to assess behavioral, neurophysiological, and neurochemical consequences of prenatal nicotine exposure in rat offspring with specific emphasis on the hippocampal glutamatergic system. Pregnant dams were infused with nicotine (6 mg/kg/day) subcutaneously from the third day of pregnancy until birth. Results indicate that prenatal nicotine exposure leads to increased anxiety and depressive-like effects and impaired spatial memory. Synaptic plasticity in the form of long-term potentiation (LTP), basal synaptic transmission, and AMPA receptor-mediated synaptic currents were reduced. The deficit in synaptic plasticity was paralleled by declines in protein levels of vesicular glutamate transporter 1 (VGLUT1), synaptophysin, AMPA receptor subunit GluR1, phospho(Ser845) GluR1, and postsynaptic density 95 (PSD-95). These results suggest that prenatal nicotine exposure by maternal smoking could result in alterations in the glutamatergic system in the hippocampus contributing to the abnormal neurobehavioral outcomes.