Approximately one third of adult Medicaid recipients smoke. The Public Health Service, the Task Force on Community Preventive Services, and the Institute of Medicine recommend that health-insurance coverage be provided for tobacco-dependence treatments. In addition, a Healthy People 2010 national health objective calls for total health-insurance coverage for evidence-based tobacco-dependence treatments in all 51 Medicaid programs (objective 27-8b). The types of tobacco-dependence treatments covered by Medicaid have been reported periodically from surveys conducted by the Center for Health and Public Policy Studies at the University of California, Berkeley. This report summarizes results of the 2006 survey, which determined that 39 state Medicaid programs (including the District of Columbia) covered some form of tobacco-dependence treatment (i.e., medication or counseling) for all Medicaid recipients and one state program provided coverage for all recommended treatments. Two states that previously provided no coverage for tobacco-dependence treatment began coverage in 2006. In addition, 32 states added coverage for a new medication, varenicline (Chantix [Pfizer, Mission, Kansas]), one state expanded its coverage to include the nicotine lozenge, and one state expanded coverage to include individual counseling. If the 2010 objective is to be achieved, Medicaid coverage for tobacco-dependence treatment must increase substantially.