The cholinergic activity in the brain is fundamental for cognitive functions. The modulatory activity of the neurotransmitter acetylcholine (ACh) is mediated by activating a variety of nicotinic acetylcholine receptors (nAChR) and muscarinic acetylcholine receptors (mAChR). Accumulating evidence indicates that both nAChR and mAChRs can modulate the release of several other neurotransmitters, modify the threshold of long-term plasticity, finally improving learning and memory processes. Importantly, the expression, distribution, and/or function of these systems are altered in several neurological diseases. The aim of this review is to discuss our current knowledge on cholinergic receptors and their regulating synaptic functions and neuronal network activities as well as their use as targets for the development of new and clinically useful cholinergic ligands. These new therapies involve the development of novel and more selective cholinergic agonists and allosteric modulators as well as selective cholinesterase inhibitors, which may improve cognitive and behavioral symptoms, and also provide neuroprotection in several brain diseases. The review will focus on two nAChR receptor subtypes found in the mammalian brain and the most commonly targeted in drug discovery programs for neuropsychiatric disorder, the ligands of α4β2 nAChR and α7 nAChRs.