ABT-594, a neuronal nicotinic acetylcholine receptor ligand, is 30- to 100-fold more potent than morphine in animal models of nociceptive and neuropathic pain. Efficacy and safety of ABT-594 in subjects with painful diabetic polyneuropathy was evaluated in a phase 2 study. The objective of this work was to use a nonlinear mixed effects model-based approach for characterizing the relationship between dose and response (efficacy and safety) of ABT-594. Subjects (N = 266) were randomized into four groups in a double-blind, placebo-controlled, 7-week study to receive twice daily regimens of placebo or 150, 225, and 300 μg of ABT-594. The primary efficacy variable, pain score (11-point Likert scale), was assessed on five occasions. The probability of change from baseline pain score of ≥1, ≥2, and ≥3 was modeled using cumulative logistic regression with dose and days of treatment as explanatory variables. The incidence of five most frequently occurring adverse events (AEs) was modeled using linear logistic regression. ABT-594 ED(50) values (improvement in 50% of subjects) for improvement in pain scores of ≥1, ≥2, and ≥3 were 50, 215, and 340 μg, respectively, for the average number of days (33) on treatment. The rank order of ED(50) values for AEs was nausea, vomiting, dizziness, headache, and abnormal dreams; nicotine users were less sensitive to AEs. Population pharmacodynamic models developed to characterize the improvement in pain score and incidence of adverse events indicate an approximately twofold separation between the ED(50) values for efficacy and AEs.