In 2005, approximately 41 million persons in the United States had health insurance coverage through Medicaid, a federally and state-funded health-care program, managed at the state level, for persons with limited incomes. An estimated 29% of adult Medicaid recipients were current smokers in 2004. The 2000 Public Health Service (PHS) clinical practice guideline recommends that insurance coverage be provided for tobacco-dependence treatments, including both medication (i.e., bupropion hydrochloride or nicotine patch, gum, inhaler, or nasal spray) and counseling (i.e., individual, group, or telephone). A national health objective for 2010 is to increase insurance coverage of evidence-based treatments for tobacco dependence among all 51 Medicaid programs (objective 27-8). The type of coverage for tobacco-dependence treatments offered by Medicaid has been reported since 1998, and most recently for 2003, from state surveys conducted by the Center for Health and Public Policy Studies at the University of California, Berkeley. All states and the District of Columbia (collectively referred to as states in this report) were resurveyed in 2005 regarding types of coverage and limitations in coverage since 1994. This report summarizes the results of that survey, which indicated that as of December 31, 2005, 1) 38 state Medicaid programs covered some tobacco-dependence treatment (i.e., counseling or medication) for all Medicaid recipients; 2) four states offered coverage only for pregnant women; 3) one state (Oregon) offered coverage for all medication and counseling treatments recommended by the 2000 PHS guideline; and 4) seven states (including Oregon) covered all recommended medications and at least one form of counseling. If the 2010 national health objective is to be achieved, states should offer or increase Medicaid coverage for treatment of tobacco dependence.