In this paper, we show that neonatal mice injected for five consecutive days with nicotine display impaired germ cell cyst breakdown and primordial follicle assembly resulting in decreased ovarian reserve lasting until sex maturation age. The effects of nicotine on the pups ovaries were associated with decreased expression of oocyte specific genes such as Nobox, Lhx8, Figlα and Sohlh2. Moreover, the ovaries of pups injected with nicotine showed increased level of cell oxidative stress and autophagic markers (upregulation of AMPKα-1, increased ratio LC3-II/LC3-I, downregulation of AKT and mTOR). Noteworthy, all these effects were counteracted by the administration of the hormone melatonin in 1 μM. In vitro culture of 0 dpp ovaries for 5 days in the presence of 10 μM nicotine reproduced its effect on germ cell cyst breakdown and primordial follicle assembly, furthermore it also revealing about 20% reduction of somatic cells proliferation, and these effects was prevented when melatonin was added to the medium. Taken together these results show that nicotine exposure can adversely affect the establishment of the ovarian reserve in the mouse likely by locally inducing cellular stress altering the primordial follicle assembly and that melatonin, however, is able to counteract such effects.