Deposition of fibrillar aggregates of the -amyloid peptide (A) is a key pathologic feature during the early stage of Alzheimer's disease. The initial neuronal responses to A in cortical circuits and the regulation of A-induced signaling remain unclear. In this study, we found that exposure of cortical slices to A 1-42 or A 25-35 induced a marked increase in the activation of protein kinase C (PKC) and Ca 2؉ /calmodulin-dependent kinase II (CaMKII), two enzymes critically involved in a variety of cellular functions. Activation of M1 muscarinic receptors, but not nicotinic receptors, significantly inhibited the A activation of PKC and CaMKII. Increasing inhibitory transmission mimicked the M1 effect on A, whereas blocking GABA A receptors eliminated the M1 action. Moreover, electrophysiological evidence shows that application of A to cortical slices induced action potential firing and enhanced excitatory postsynaptic currents, whereas muscarinic agonists potently increased inhibitory postsynaptic currents. These results suggest that A activates PKC and CaMKII through enhancing excitatory activity in glutamatergic synaptic networks. Activation of M1 receptors inhibits A signaling by enhancing the counteracting GABA ergic inhibitory transmission. Thus the muscarinic reversal of the A-induced biochemical and physiological changes provides a potential mechanism for the treatment of Alzheimer's disease with cholinergic enhancers.The 40 -42-amino acid -amyloid peptide (A) 1 is a major constituent of senile plaques (1), extracellular protein aggregates that are used as a histopathological hallmark for the diagnosis of Alzheimer's disease (AD). Emerging evidence has suggested that A makes a direct contribution to the pathogenesis of AD (2, 3). A peptides are produced by the cleavage of -amyloid precursor protein (APP) (4). Mutations in the APP gene increases the rate of cleavage, thereby leading to the overproduction of A (5, 6). Transgenic mice overexpressing mutant APP genes exhibit AD-like A deposits and cognition impairments (7-9). In vitro studies in cell lines and cultured neurons show that fibrillar A is neurotoxic at high concentrations (10, 11), and most strikingly, A exposure renders neurons more vulnerable to excitatoxicity (12, 13). Although intensive efforts have been concentrated on factors affecting A production, aggregation, and metabolism (14, 15), little is known about the earliest biochemical and physiological changes in neurons in response to the subtoxic concentrations of A, which may be critical for subsequent neurodegenerative changes and the factors that can regulate the A-initiated signaling.In addition to A deposits, a prominent feature of AD is the degeneration of basal forebrain cholinergic neurons and ensuing deficient cholinergic functions in their target areas including cortex and hippocampus (16 -18). Despite an improved understanding of the critical role of the cholinergic system in normal cognition and dementia (19,20), it has been largely unclear how cholinergic ...