Nichols was last seen on December 21, 1985 in Poughkeepsie, New York. Her husband reported her disappearance after he realized she had failed to keep a haircutting appointment at a local beauty parlor. The next day, Nichols's car was found locked and abandoned in the parking lot of the former 9 Mall Shopping Center on South Road in Poughkeepsie. There was no sign of her at the scene. She did not take any of her personal belongings when she vanished and there has been no activity on her bank accounts and credit records since her disappearance.

Nichols left a despondent note on her computer before she disappeared. Investigators looked into the possibility that she committed suicide and checked local waterways, which were frozen that time of year, but found no trace of her. Her family says it is uncharacteristic of her to leave without warning.

Nichols was a first-grade teacher at Gayhead Elementary School when she vanished. She was also a graduate student at Louisiana State University, where she had only to complete her dissertation to receive a doctorate of education. Her mother resided in Shreveport, Louisiana at the time of Nichols's disappearance, and Nichols called her every week. Nichols's husband has been ruled out as a suspect in her disappearance, which remains unsolved.