Galanin, a 29-amino-acid neuropeptide, is generally viewed as an inhibitory neuromodulator in a variety of central systems. Galanin expression is upregulated in the cholinergic basal forebrain nuclei in Alzheimer's disease (AD) and is postulated to play an important role in memory and cognitive function. In this study, application of galanin to acutely dissociated rat neurons from the basal forebrain nucleus diagonal band of Broca (DBB), caused a decrease in whole cell voltage-activated currents in a majority of cells. Galanin reduces a suite of potassium currents, including calcium-activated potassium (I(C)), the delayed rectifier (I(K)), and transient outward potassium (I(A)) conductances, but not calcium or sodium currents. Under current-clamp conditions, application of galanin evoked an increase in excitability and a loss of accommodation in cholinergic DBB neurons. Using single-cell RT-PCR technique, we determined that galanin actions were specific to cholinergic, but not GABAergic DBB neurons The notion that galanin plays a deleterious role in AD is based, in part, on galanin hyperinnervation of cholinergic cells in the basal forebrain of AD patients, its ability to depress acetylcholine release and its inhibitory actions at other CNS sites. However, our results suggest that by virtue of its excitatory actions on cholinergic neurons, galanin may in fact play a compensatory role by augmenting the release of acetylcholine from remaining cholinergic basal forebrain neurons. This action might serve to delay the progression of AD pathology linked to a reduction in central cholinergic tone.