The deposition of amyloid beta-protein (Abeta) in the brain and the loss of cholinergic neurons in the basal forebrain are two pathological hallmarks of Alzheimer's disease (AD). Although the mechanism of Abeta neurotoxicity is unknown, these cholinergic neurons display a selective vulnerability when exposed to this peptide. In this study, application of Abeta(25-35) or Abeta(1-40) to acutely dissociated rat neurons from the basal forebrain nucleus diagonal band of Broca (DBB), caused a decrease in whole cell voltage-activated currents in a majority of cells. This reduction in whole cell currents occurs through a modulation of a suite of potassium conductances including calcium-activated potassium (I(C)), the delayed rectifier (I(K)), and transient outward potassium (I(A)) conductances, but not calcium or sodium currents. Under current-clamp conditions, Abeta evoked an increase in excitability and a loss of accommodation in cholinergic DBB neurons. Using single-cell RT-PCR technique, we determined that Abeta actions were specific to cholinergic, but not GABAergic DBB neurons. Abeta effects on whole cell currents were occluded in the presence of membrane-permeable protein tyrosine kinase inhibitors, genistein and tyrphostin B-44. Our data indicate that the Abeta actions on specific potassium conductances are modulated through a protein tyrosine kinase pathway and that these effects are selective to cholinergic but not GABAergic cells. These observations provide a cellular basis for the selectivity of Abeta neurotoxicity toward cholinergic basal forebrain neurons that are at the epicenter of AD pathology.