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Cholinergic neurons project throughout the nervous system and activate nicotinic receptors to modulate synaptic function in ways that shape higher order brain function. The acute effects of nicotinic signaling on long-term synaptic plasticity have been well-characterized. Less well understood is how chronic exposure to low levels of nicotine, such as those encountered by habitual smokers, can alter neural connections to promote addiction and other lasting behavioral effects. We show here that chronic exposure of hippocampal neurons in culture to low levels of nicotine recruits AMPA and NMDA receptors to the cell surface and sequesters them at postsynaptic sites. The receptors include GluA2-containing AMPA receptors, which are responsible for most of the excitatory postsynaptic current mediated by AMPA receptors on the neurons, and include NMDA receptors containing GluN1 and GluN2B subunits. Moreover, we find that the nicotine treatment also increases expression of the presynaptic component synapsin 1 and arranges it in puncta juxtaposed to the additional AMPA and NMDA receptor puncta, suggestive of increases in synaptic contacts. Consistent with increased synaptic input, we find that the nicotine treatment leads to an increase in the excitatory postsynaptic currents mediated by AMPA and NMDA receptors. Further, the increases skew the ratio of excitatory-to-inhibitory input that the cell receives, and this holds both for pyramidal neurons and inhibitory neurons in the hippocampal CA1 region. The GluN2B-containing NMDA receptor redistribution at synapses is associated with a significant increase in GluN2B phosphorylation at Tyr1472, a site known to prevent GluN2B endocytosis. These results suggest that chronic exposure to low levels of nicotine not only alters functional connections but also is likely to change excitability levels across networks. Further, it may increase the propensity for synaptic plasticity, given the increase in synaptic NMDA receptors.