Extensive studies during the past two decades provide compelling evidence that the gonadal steroid, estrogen, has the potential to affect the viability of basal forebrain cholinergic neurons. These observations reflect a unique ameliorative feature of estrogen as it restores and protects the cholinergic neurons against noxious stimuli or neurodegenerative processes. Hence, we first address the ameliorative function of estrogen on basal forebrain cholinergic neurons such as the actions of estrogen on neuronal plasticity of cholinergic neurons, estrogen-induced memory enhancement and the ameliorative role of estrogen on cholinergic neuron related neurodegenerative processes such as Alzheimer's disease. Second, we survey recent data as to possible mechanisms underlying the ameliorative actions of estrogen; influencing the amyloid precursor protein processing, enhancement in neurotrophin receptor signaling and estrogen-induced non-classical actions on second messenger systems. In addition, clinical relevance, pitfalls and future aspects of estrogen therapy on basal forebrain cholinergic neurons will be discussed.