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Objective: Nicotine use in schizophrenia remains markedly higher than in the general population, contributing to increased morbidity, relapse, and functional impairment. While biological factors have been widely studied, limited attention has been given to the psychosocial factors that sustain nicotine use in this group. This review synthesizes available evidence on these psychosocial influences to inform intervention planning and policy development. Methods: A narrative review was conducted using PubMed, Scopus, ProQuest, and Google Scholar to identify studies from 2000 to 2025 that examined psychosocial, socio-cultural, or systemic factors associated with nicotine use in schizophrenia. Thirty articles meeting the inclusion criteria were analyzed thematically across three domains: psychological, socio-cultural, and systemic influences. Results: Psychological factors such as stress regulation, cognitive enhancement, loneliness, maladaptive coping, and low self-efficacy reinforced nicotine use. Socio-cultural determinants included male gender, unmarried status, peer influence, social exclusion, stigma, and familial smoking patterns, while systemic enablers encompassed institutional permissiveness, limited cessation support, and pro-tobacco policies. Collectively, these dimensions interact to maintain nicotine dependence and impede recovery and contribute to an increased risk of relapse in schizophrenia, poorer prognosis, higher Disability- Adjusted Life Years, impaired functional recovery, and disability. Conclusions: Nicotine use in schizophrenia is reinforced by interconnected psychosocial and structural forces extending beyond biological vulnerability. A biopsychosocial approach-combining psychoeducation, family support, social rehabilitation, and institutional policy reform-offers a pathway to sustainable cessation and functional recovery in this population.