Alzheimer's disease is a neurodegenerative disorder characterized by neuronal loss associated with a progressive impairment of cognitive functions. Early consequences of Alzheimer's disease include deficit of cholinergic signalling in particular regions controlling memory processes, such as the cortex and hippocampus, and accumulation of beta-amyloid (Abeta) peptide in neuritic plaques. The cholinergic system depends for its integrity and function on nerve growth factor. Chronic nerve growth factor deprivation in transgenic mice (AD11) engineered to produce recombinant neutralizing anti-nerve growth factor antibodies leads to progressive age-dependent Alzheimer's-like neurodegenerative pathology similar to that found in patients with Alzheimer's disease, associated with a selective loss of cholinergic neurones in the basal forebrain. Here we show that in the hippocampus of 6-month-old AD11 mice, Abeta aggregates started appearing in the CA1 region. The accumulation of Abeta was associated with a loss of cholinergic function at CA3-CA1 synapses. Whereas in wild-type mice nicotine induced a persistent increase of synaptic efficacy via alpha7 nicotine acetylcholine receptors, in AD11 mice this alkaloid failed to modify synaptic strength. Moreover, nicotine failed to transiently enhance the frequency of spontaneous miniature glutamatergic currents (miniature excitatory postsynaptic currents) recorded from CA1 but not from CA3 pyramidal neurones of AD11 mice. However, in CA3 principal cells of AD11 mice, the potentiating effect of nicotine on miniature excitatory postsynaptic currents was prevented when Abeta peptide 1-42 was added to the extracellular solution. These data suggest that in AD11 mice, Abeta interferes with nicotine acetylcholine receptors at the level of presynaptic glutamatergic terminals, inhibiting their function possibly through calcium signalling via presynaptic alpha7 nicotine acetylcholine receptors.