To elucidate the possible metabolic mechanism of intrauterine growth retardation induced by nicotine, this study determines the effects of prenatal nicotine exposure on fetal development and cytochrome P4501A1 (CYP1A1), CYP2E1, and P-glycoprotein (Pgp) expression in maternal liver and placenta. Pregnant rats were given 1.0 mg/kg nicotine subcutaneously twice a day from gestational day (GD) 8 to GD 15, 18, or 21. In nicotine-treated groups, fetal developmental parameters including body weight were significantly lower. The activities of CYP1A1 and CYP2E1 in maternal liver microsomes in nicotine-treated groups increased significantly with progressing gestation when compared with the corresponding control, but returned to the level similar to the control in late pregnancy. Nicotine-treated groups induced pathological changes and increased malondialdehyde (MDA) content in the placenta when compared with the control. The gene expressions of CYP1A1 and CYP2E1 in the placenta increased significantly in nicotine-treated groups on GD 15 and GD 18, but returned to the level similar to the corresponding control on GD 21. In nicotine group, there was a decrease of mdr1a expression on GD 15, GD 18, and GD 21, with the most significant decrease on GD 15. In contrast, no significant difference was found in mdr1b mRNA expression between the nicotine-treated animals and the corresponding control. In comparison with the corresponding control, the placental Pgp protein significantly decreased on GD 15 and GD 18. Our results showed that prenatal nicotine exposure resulted in inhibition of fetal growth significantly. The induction of CYP2E1 and CYP1A1 gene expression by nicotine in the maternal liver and placenta may be involved with the observed increase in oxidative stress and lipid peroxidation. The inhibition of the placental Pgp expression by nicotine may also contribute to an increased susceptibility of the fetus to environmental toxins.