The metabotropic glutamate type 5 (mGlu5) receptor has emerged as a potential target for the treatment of psychosis that is suggested to have greater efficacy than antipsychotic medications that are currently utilized. This study sought to elucidate mechanisms of therapeutic action associated with the modulation of the mGlu5 receptor in a disordered system marked by dopamine dysfunction. We further explored epigenetic mechanisms contributing to heritable transmission of a psychosis-like phenotype in a novel heritable model of drug abuse vulnerability in psychosis. F1 generation male and female Sprague-Dawley rats that were the offspring of two neonatal quinpirole-treated (QQ) or two saline-treated (SS) animals were tested on nicotine-conditioned place preference (CPP). Regulators of G protein signaling 9 (RGS9) and β-arrestin 2 (βA2), which mediate dopamine (DA) D2 signaling, were measured in the nucleus accumbens shell, prelimbic and infralimbic cortices. Reduced Representation Bisulfite Sequencing (RRBS) was used to analyze the cytosine methylation in these brain regions. Pretreatment with the mGlu5-positive allosteric modulator 3-Cyano-N-(1,3-diphenyl-1H-pyrazol-5-yl)benzamide (CDPPB) 20 min prior to conditioning trials blocked enhanced nicotine CPP and mitigated aberrant G protein-dependent and -independent signaling in QQ animals. RRBS analysis revealed region-specific changes in several pathways, including nicotine addiction, dopamine synapses, and neural connectivity. These results reveal an important region-specific mechanism of action for CDPPB in a system marked by enhanced DAD2 receptor signaling. Results additionally reveal DNA methylation as an epigenetic mechanism of heritability, further validating the current model as a useful tool for the study of psychosis and comorbid nicotine use.