The medial habenula to interpeduncular nucleus pathway is a highly conserved and densely innervated brain circuit known for its unique cholinergic transmission and exceptional expression of nicotinic acetylcholine receptors. This pathway plays a critical role in regulating motivational and emotional processes, particularly those related to nicotine consumption, avoidance behaviors, and negative emotional states. Recent advances have revealed the intricate cellular architecture and receptor diversity of this system, highlighting how specific subunits of acetylcholine receptors influence both the rewarding and aversive properties of nicotine. Genetic and functional studies in rodents and humans point to this pathway as a key regulator of nicotine intake, with potential implications for addiction treatment. In this review, we examine the organization and molecular composition of nicotinic receptors within this pathway, describe their functional and behavioral roles, and explore how cholinergic signaling contributes to nicotine dependence, stress responses, and affective states.