Agonists and positive allosteric modulators of the alpha(7) nicotinic acetylcholine receptor (nAChR) are currently being developed for the treatment of cognitive disturbances in patients with schizophrenia or Alzheimer's disease. This review describes the neurobiological properties of the alpha nAChR and the cognitive effects of alpha(7) nAChR activation, focusing on the translational aspects in the development of these drugs. The functional properties and anatomical localization of the alpha(7) nAChR makes it well suited to modulate cognitive function. Accordingly, systemic administration of alpha(7) nAChR agonists improves learning, memory, and attentional function in variety of animal models, and pro-cognitive effects of alpha(7) nAChR agonists have recently been demonstrated in patients with schizophrenia or Alzheimer's disease. The alpha(7) nAChR desensitizes rapidly in vitro, and this has been a major concern in the development of alpha(7) nAChR agonists as putative drugs. Our review of the existing literature shows that development of tolerance to the behavioral effects of alpha(7) nAChR agonists does not occur in animal models or humans. However, the long-term memory-enhancing effects seen in animal models are not mimicked in healthy humans and schizophrenic patients, where attentional improvement predominates. This discrepancy may result from inherent differences in testing methods or from species differences in the level of expression of alpha(7) nAChRs in limbic brain regions, and may hamper preclinical evaluation of alpha(7) nAChR activation. It is therefore important to consider the translational power of the animal models used before entering into a clinical evaluation of the pro-cognitive effects of alpha(7) nAChR activation.