Neurogenesis in the subgranular zone of the hippocampal dentate gyrus and olfactory bulbs continues into adulthood and has been implicated in the cognitive function of the adult brain. The basal forebrain cholinergic system has been suggested to play a role in regulating neurogenesis as well as learning and memory in these regions. Herein, we report that highly polysialylated neural cell adhesion molecule (PSA-NCAM)-positive immature cells as well as neuronal nuclei (NeuN)-positive mature neurons in the dentate gyrus and olfactory bulb express multiple acetylcholine receptor subunits and make contact with cholinergic fibers. To examine the function of acetylcholine in neurogenesis, we used donepezil (Aricept), a potent and selective acetylcholinesterase inhibitor that improves cognitive impairment in Alzheimer's disease. Intraperitoneal administrations of donepezil significantly enhanced the survival of newborn neurons, but not proliferation of neural progenitor cells in the subgranular zone or the subventricular zone of normal mice. Moreover, donepezil treatment reversed the chronic stress-induced decrease in neurogenesis. Taken together, these results suggest that activation of the cholinergic system promotes survival of newborn neurons in the adult dentate gyrus and olfactory bulb under both normal and stressed conditions.