Natural and drug rewards increase the motivational valence of stimuli in the environment that, through Pavlovian learning mechanisms, become conditioned stimuli that directly motivate behavior in the absence of the original unconditioned stimulus. While the hippocampus has received extensive attention for its role in learning and memory processes, less is known regarding its role in drug-reward associations. We used in vivo Ca²⁺ imaging in freely moving mice during the formation of nicotine preference behavior to examine the role of the dorsal-CA1 region of the hippocampus in encoding contextual reward-seeking behavior. We show the development of specific neuronal ensembles whose activity encodes nicotine-reward contextual memories and that are necessary for the expression of place preference. Our findings increase our understanding of CA1 hippocampal function in general and as it relates to reward processing by identifying a critical role for CA1 neuronal ensembles in nicotine place preference.