Recent studies suggest that apolipoprotein E (apoE) plays a specific role in brain cholinergic function and that the E4 allele of apoE (apoE4), a major risk factor for Alzheimer's disease (AD), may predict the extent of cholinergic dysfunction and the efficacy of cholinergic therapy in this disease. Animal model studies relevant to this hypothesis revealed that apoE-deficient (knockout) mice have working memory impairments that are associated with distinct dysfunction of basal forebrain cholinergic neurons. Cholinergic replacement therapy utilizing M1-selective muscarinic agonists has been proposed as effective treatment for AD patients. In the present study, we examined whether the memory deficits and brain cholinergic deficiency of apoE-deficient mice can be ameliorated by the M1-selective agonist 1-methylpiperidine-4-spiro-(2'-methylthiazoline), [AF150(S)]. Treatment of apoE-deficient mice with AF150(S) for 3 weeks completely abolished their working memory impairments. Furthermore, this reversal of cognitive deficit was associated with a parallel increase of histochemically determined brain choline acetyltransferase and acetylcholinesterase levels and with the recovery of these cholinergic markers back to control levels. These findings show that apoE deficiency-related cognitive and cholinergic deficits can be ameliorated by M1-selective muscarinic treatment. They also provide a novel model system for development and evaluation of therapeutic strategies directed specifically at the AD patients whose condition is attributed to the apoE genotype.