In the septohippocampal formation alpha7 nicotinic receptors (alpha7 nAChRs) are predominantly expressed by neurons well positioned to modulate hippocampal theta oscillation, such as GABAergic interneurons in the hippocampus, and by both GABAergic and cholinergic septal neurons. In the present experiments, we evaluated the efficacy of the recently developed selective alpha7 nAChR agonist PNU-282987 on hippocampal theta oscillation in anaesthetized rats. This compound shows high affinity for the rat alpha7 nAChRs (Ki = 26 nM) but a negligible activity at other nAChRs. Systemic administration of PNU-282987 significantly enhanced the power (by 40%) of hippocampal theta oscillation induced by electrical stimulation of the brainstem reticular formation. In contrast, the amnesic and muscarinic receptor antagonist scopolamine significantly decreased the power (by 68%) of the stimulation-induced theta oscillation. Given the connection between hippocampal theta oscillation and cognitive processes, it is proposed that precognitive actions of alpha7 nAChR agonists could be mediated, at least in part, by modulation of hippocampal oscillatory activity.