Analysis of data from a household interview of young adults in Michigan was conducted to determine the prevalence of smoking and nicotine dependence and to examine the relationship of nicotine dependence with health indicators in black and white smokers. The NIMH Diagnostic Interview Schedule, revised to cover DSM-III-R diagnoses, was used to assess nicotine dependence. A greater proportion of whites than blacks tried smoking, became regular smokers and met criteria for nicotine dependence. Whites had their first cigarette, began smoking regularly and manifested symptoms of nicotine dependence at a younger age than blacks. Nicotine dependence, rather than smoking per se, was associated with poor physical and psychological health among both blacks and whites. However, it had stronger associations with health problems in blacks than in whites.