N-methyl-d-aspartate glutamate receptor (NMDAR) hypofunction has been implicated in the pathophysiology of schizophrenia, including auditory processing abnormalities reflected by the mismatch negativity (MMN) event-related potential component. Evidence suggesting cognitive benefits from nicotine administration, together with the high rate of cigarette use in patients with schizophrenia, has stimulated interest in whether nicotine modulates NMDAR hypofunction. We examined the interactive effects of ketamine, an NMDAR antagonist that produces transient schizophrenia-like neurophysiological effects, and nicotine, a nicotinic acetylcholine receptor (nAChR) agonist, in 30 healthy volunteers to determine whether nicotine prevents or attenuates MMN abnormalities. Secondary analyses compared the profile of ketamine and schizophrenia effects on MMN using previously reported data from 24 schizophrenia patients (Hay et al. 2015). Healthy volunteers completed four test days, during which they received ketamine/placebo and nicotine/placebo in a double-blind, counterbalanced design. MMN to intensity, frequency, duration, and frequency+duration double deviant sounds was assessed each day. Ketamine decreased intensity, frequency, and double deviant MMN amplitudes, whereas nicotine increased intensity and double deviant MMN amplitudes. A ketamine×nicotine interaction indicated, however, that nicotine failed to attenuate the decrease in MMN associated with ketamine. Although the present dose of ketamine produced smaller decrements in MMN than those associated with schizophrenia, the profile of effects across deviant types did not differ between ketamine and schizophrenia. Results suggest that while ketamine and schizophrenia produce similar profiles of MMN effects across deviant types, nicotinic agonists may have limited potential to improve these putative NMDAR hypofunction-mediated impairments in schizophrenia.