Nichols is still carrying out academic research on the chemistry of psychedelics. He has published approximately 250 scientific reports and book chapters, all describing the relationship between the structure of a molecule and its biological effects. He has done extensive work using the rat model assay of drug discrimination in characterizing hallucinogenic drugs. Although his research mostly uses rats, a number of compounds included in Shulgin's PIHKAL were actually first synthesized in Nichols's lab. His lab also first developed --DOI as a radioligand. Nichols is one of the few people who has published legitimate research on the chemistry and pharmacology of LSD in the last 20 years, and first reported that several LSD analogues, including ETH-LAD, PRO-LAD, and AL-LAD, were more potent than LSD itself. Their human effects are described in TiHKAL. He also improved the synthesis of psilocybin so that it would be accessible for several recent clinical studies. Other notable research he helped carry out includes extensive studies of the structure-activity relationships and mechanisms of action of MDA and MDMA, during which he helped to discover many novel analogues including such compounds as 5-methyl-MDA, 4-MTA and MDAI. Nichols has said that "he believes gray-market chemists used information from papers he published on 4-methylthioamphetamine in the 1990s to synthesize the drug, which they sold in tablets nicknamed "flatliners" as a substitute for MDMA." More recently, Nichols has become one of the world leaders in research on dopamine, and his team has developed several notable dopamine receptor ligands, including the selective D1 full agonist compounds dihydrexidine and dinapsoline which have been researched for the treatment of Parkinson's disease, and a number of other subtype-selective dopamine agonists derived from dinoxyline. He co-founded DarPharma, Inc. to commercialize his dopamine compounds; several of his team's compounds are now being studied in clinical trials for the treatment of Parkinson's disease and the cognitive and memory deficits of schizophrenia.
producers who scan scientific literature for information on compounds with potential grey market value have described Nichols' publications as an "especially valuable" road map to making new designer drugs. Several deaths have been attributed to compounds that have been discovered in Nichols' lab, which he finds quite upsetting, "I was stunned by this revelation, and it left me with a hollow and depressed feeling for some time."