Nicotine consumption is higher for people within the schizophrenia spectrum compared to controls. This observation supports the self-medication hypothesis, that nicotine relives symptoms in, for example, schizophrenia patients. We tested whether performance in an endophenotype of schizophrenia (visual backward masking, VBM) is modulated by nicotine consumption in i) smoking and non-smoking schizophrenia patients, their first-degree relatives, and age-matched controls, ii) non-smoking and smoking university students, and iii) non-smoking, early and late onset nicotine smokers. Overall, our results confirmed that VBM deficits are an endophenotype of schizophrenia, i.e., deficits were highest in patients, followed by their relatives, students scoring high in Cognitive Disorganisation, and controls. Moreover, we found i) beneficial effects of chronic nicotine consumption on VBM performance, in particular with increasing age, and ii) little impact of clinical status alone or in interaction with nicotine consumption on VBM performance. Given the younger age of undergraduate students (up to 30 years) versus controls and patients (up to 66 years), we propose that age-dependent VBM deficits emerge when schizotypy effects are targeted in populations of a larger age range, but that nicotine consumption might counteract these deficits (supporting the self-medication hypothesis).