We have earlier reported that Abeta were significantly reduced in brains of smoking Alzheimer patients and control subjects compared with non-smokers, as well as in nicotine treated APPsw transgenic mice. To examine the mechanisms by which nicotine modulates APP processing we here measured levels of secreted amyloid precursor protein (sAPPalpha), total sAPP, Abeta40 and Abeta42 in different cell lines expressing different nicotinic receptor (nAChR) subtypes or no nAChRs. Treatment with nicotine increased release of sAPPalpha and at the same time lowered Abeta levels in both SH-SY5Y and SH-SY5Y/APPsw cells expressing alpha3 and alpha7 nAChR subtypes. These effects could also be evoked by co-treatment with the competitive alpha7 nAChR antagonists alpha-bungarotoxin and methyllycaconitine (MLA), and by these antagonists alone, suggesting that binding to the agonist binding site, rather than activation of the receptor, may be sufficient to trigger changes in APP processing. The nicotine-induced increase in sAPPalpha could only be blocked by co-treatment with the open channel blocker mecamylamine. In addition to nicotine, the agonists epibatidine and cytisine both significantly increased the release of sAPP in M10 cells expressing the alpha4/beta2 nAChR subtype, and this effect was blocked by co-treatment with mecamylamine but not by the alpha4/beta2 competitive antagonist dihydro-beta-erythroidine. The lack of effect of nicotine on sAPPalpha and Abeta levels in HEK 293/APPsw cells, which do not express any nAChRs, demonstrates that the nicotine-induced attenuation of beta-amyloidosis is mediated by nAChRs and not by a direct effect of nicotine. Our data show that nicotinic compounds stimulate the non-amyloidogenic pathway and that alpha4 and alpha7 nAChRs play a major role in modulating this process. Nicotinic drugs directed towards specific nAChR subtypes might therefore be beneficial for the treatment of AD not only by lowering Abeta production but also by enhance release of neuroprotective sAPPalpha.