Tobacco use disorder continues to be a leading public health issue and cause of premature death in the United States. Nicotine is considered as the major tobacco alkaloid causing addiction through its actions on nicotinic acetylcholine receptors (nAChRs). Current pharmacotherapies targeting nicotine’s effects produce only modest effectiveness in promoting cessation, highlighting the critical need for a better understanding of mechanisms of nicotine addiction to inform future treatments. There is growing interest in identifying potential contributions of non-nicotine components to tobacco reinforcement. Cotinine is a minor alkaloid, but the major metabolite of nicotine that can act as a weak agonist of nAChRs. Accumulating evidence indicates that cotinine produces diverse effects and may contribute to effects of nicotine. In this review, we summarize findings implicating cotinine as a neuroactive metabolite of nicotine and discuss available evidence regarding potential mechanisms underlying its effects. Preclinical findings reveal that cotinine crosses the blood brain barrier and interacts with both nAChRs and non-nAChRs in the nervous system, and produces neuropharmacological and behavioral effects. Clinical studies suggest that cotinine is psychoactive in humans. However, reviewing evidence regarding mechanisms underlying effects of cotinine provides a mixed picture with a lack of consensus. Therefore, more research is warranted in order to provide better insight into the actions of cotinine and its contribution to tobacco addiction.