γ oscillations are associated with higher brain functions such as memory, perception and consciousness. Disruption of γ oscillations occur in various neuro-psychological disorders such as schizophrenia. Nicotinic acetylcholine receptors (nAChR) are highly expressed in the hippocampus, however, little is known about the role on hippocampal persistent γ oscillation. This study examined the effects of nicotine and selective nAChR agonists and antagonists on kainate-induced persistent γ oscillation in rat hippocampal slices. Nicotine enhanced γ oscillation at concentrations of 0.1-10 μM, but reduced it at a higher concentration of 100 μM. The enhancement on γ oscillation can be best mimicked by co-application of α4β2- and α7-nAChR agonist and reduced by a combination of nAChR antagonists, DhβE and MLA. However, these nAChR antagonists failed to block the suppressing role of nicotine on γ. Furthermore, we found that the NMDA receptor antagonist D-AP5 completely blocked the effect of nicotine. These results demonstrate that nicotine modulates γ oscillations via α7 and α4β2 nAChR as well as NMDA activation, suggesting that nAChR activation may have a therapeutic role for the clinical disorder such as schizophrenia, which is known to have impaired γ oscillation and hypo-NMDA receptor function.