The discovery of genetic variants in the cholinergic receptor nicotinic CHRNA5-CHRNA3-CHRNB4 gene cluster associated with heavy smoking and higher relapse risk has led to the identification of the midbrain habenula- interpeduncular axis as a critical relay circuit in the control of nicotine dependence. Although clear roles for α3, β4, and α5 receptors in nicotine aversion and withdrawal have been established, the cellular and molecular mechanisms that participate in signaling nicotine use and contribute to relapse have not been identified. Here, using translating ribosome affinity purification (TRAP) profiling, electrophysiology, and behavior, we demonstrate that cholinergic neurons, but not peptidergic neurons, of the medial habenula (MHb) display spontaneous tonic firing of 2-10 Hz generated by hyperpolarization-activated cyclic nucleotidegated (HCN) pacemaker channels and that infusion of the HCN pacemaker antagonist ZD7288 in the habenula precipitates somatic and affective signs of withdrawal. Further, we show that a strong, α3β4- dependent increase in firing frequency is observed in these pacemaker neurons upon acute exposure to nicotine. No change in the basal or nicotine-induced firing was observed in cholinergic MHb neurons from mice chronically treated with nicotine. We observe, however, that, during withdrawal, reexposure to nicotine doubles the frequency of pacemaking activity in these neurons. These findings demonstrate that the pacemaking mechanism of cholinergic MHb neurons controls withdrawal, suggesting that the heightened nicotine sensitivity of these neurons during withdrawal may contribute to smoking relapse.