3-[(2,4-dimethoxy)benzylidene]-anabaseine dihydrochloride (DMXBA; GTS-21), an Alzheimer's drug candidate, selectively stimulates alpha7 nicotinic acetylcholine receptors. It rapidly enters the brain after oral administration and enhances cognitive behavior. Less than 1% of orally administered DMXBA is recovered in the urine. We report the identification and characterization of the major phase I metabolites of this drug candidate. Three hydroxy metabolites were generated in vitro by hepatic microsomal O-dealkylation of the two methoxy substituents on the benzylidene ring. They were also found in plasma of rats after oral administration, but at significantly lower concentrations relative to the parent compound. The metabolites displayed similar binding affinities and partial agonist potencies at rat brain alpha7 receptors. However, each displayed a higher efficacy than DMXBA for stimulating rat and human alpha7 receptors. Like DMXBA, the metabolites were weak antagonists at alpha4beta2 receptors. The predicted conformations of the metabolites were nearly identical with that of DMXBA. Ionization of the tetrahydropyridyl nitrogen was essential for high-affinity binding of DMXBA to the alpha7 receptor. The hydroxy metabolites were much more polar than DMXBA, derived from their experimentally estimated octanol/water partition coefficients, and they entered the brain much less readily than DMXBA. Their contributions to the behavioral effects of orally administered DMXBA, if any, would probably be very small during short-term administration. Benzylidene anabaseines pharmacologically similar to the hydroxy metabolites, but which enter the brain more readily, may provide greater stimulation of alpha7 receptors in the whole organism.