To study the effects of nicotine on retinal pigment epithelium (RPE) cells in vivo and in vitro, (Balb/c x C57Bl/6) F1 mice were given water containing 100 microg/mL nicotine for six months. Cultured fetal RPE cells were treated with nicotine or lipopolysaccharide for seventy-two hours. Expression of matrix metalloproteinase protein (MMP)2, MMP9, and VEGF was measured using Western blot. Expression of IL6 and IL8 was measured using real-time polymerase chain reaction or enzyme-linked immunosorbent assay. Electron microscopy was performed to observe the effects of nicotine on morphological changes of mice retina or cultured RPE cells, and filamentous actin in RPE cells was stained with phalloidin. Electron microscopy revealed that nicotine-treated mice showed thinner outer nuclear layers, fewer pigment granules in RPE cells, and a damaged photoreceptor-RPE interface when compared with age-control mice. When added to cultured RPE cells, nicotine induced accumulation of osmiophilic lamellated intracellular inclusions in cytoplasm, mitochondrion hypertrophy and vacuolar degeneration, and redistribution of actin in cells without affecting cell proliferation. Expression of MMP2 and MMP9 in nicotine-treated RPE cells was decreased. Nicotine-induced changes in RPE morphology and function provide insight into pathogenesis of smoking-related retinal diseases.