The present study examined whether aged rats with naturally occurring cognitive deficits in spatial learning and memory would benefit from local chronic supplementation of acetylcholine. Aged impaired and aged unimpaired rats were pretested in the water maze to characterize the extent of age-induced cognitive impairment. Groups were matched for extent of deficits. The animals subsequently received implants of either acetylcholine-releasing cells or control cells into the cortical and hippocampal target regions of the basal forebrain. One week postgrafting, spatial learning and memory were retested using the same behavioral procedure. All aged groups acquired the platform position more slowly than young controls. However, aged impaired rats grafted with acetylcholine-releasing cells performed significantly better than aged impaired rats with control grafts, and they did not differ from aged unimpaired groups. A spatial memory probe test revealed that memory for the escape platform location of the acetylcholine-grafted rats was significantly better than that of rats with control grafts and matched the performance of young controls. In vitro, biochemical and electrophysiological analyses of the engineered cells confirmed choline acetyltransferase activity and showed quantal release of acetylcholine from the transduced cells. In vivo, RT-PCR of microdissected grafts indicated that the engineered cells expressed the choline acetyltransferase transgene for up to 40 days postgrafting. These results indicate that locally restricted supplementation of acetylcholine into the two major target regions of the cholinergic basal forebrain of aged impaired rats ameliorates some age-related cognitive deficits.