Heteromeric nAChRs are pentameric cation channels, composed of combinations of two or three α and three or two β subunits, which play key physiological roles in the central and peripheral nervous systems. The prototypical agonist nicotine acts intracellularly to upregulate many nAChR subtypes, a phenomenon that is thought to contribute to the nicotine dependence of cigarette smokers. The α3β4 subtype has recently been genetically linked to nicotine dependence and lung cancer; however, the mode of action of nicotine on this receptor subtype has been incompletely investigated. Here, using transfected mammalian cells as model system, we characterized the response of the human α3β4 receptor subtype to nicotine and the mechanism of action of the drug. Nicotine, when present at 1 mm concentration, elicited a ∼5-fold increase of cell surface α3β4 and showed a more modest upregulatory effect also at concentrations as low as 10 μM. Upregulation was obtained if nicotine was present during, but not after, pentamer assembly and was caused by increased stability and trafficking of receptors assembled in the presence of the drug. Experimental determinations as well as computational studies of subunit stoichiometry showed that nicotine favors assembly of pentamers with (α3)2(β4)3 stoichiometry; these are less prone than (α3)3(β4)2 receptors to proteasomal degradation and, because of the presence in the β subunit of an endoplasmic reticulum export motif, more efficiently transported to the plasma membrane. Our findings uncover a novel mechanism of nicotine-induced α3β4 nAChR upregulation that may be relevant also for other nAChR subtypes.