There is a significantly elevated incidence of epilepsy in Alzheimer's disease (AD). Moreover, there is neural hyperexcitation/synchronization in transgenic mice expressing abnormal levels or forms of amyloid precursor protein and its presumed, etiopathogenic product, amyloid-β1-42 (Aβ). However, the underlying mechanisms of how Aβ causes neuronal hyperexcitation remain unclear. Here, we report that exposure to pathologically relevant levels of Aβ induces Aβ form-dependent, concentration-dependent, and time-dependent neuronal hyperexcitation in primary cultures of mouse hippocampal neurons. Similarly, Aβ exposure increases levels of nicotinic acetylcholine receptor (nAChR) α7 subunit protein on the cell surface and α7-nAChR function, but not α7 subunit mRNA, suggesting post-translational upregulation of functional α7-nAChRs. These effects are prevented upon coexposure to brefeldin A, an inhibitor of endoplasmic reticulum-to-Golgi protein transport, consistent with an effect on trafficking of α7 subunits and assembled α7-nAChRs to the cell surface. Aβ exposure-induced α7-nAChR functional upregulation occurs before there is expression of neuronal hyperexcitation. Pharmacological inhibition using an α7-nAChR antagonist or genetic deletion of nAChR α7 subunits prevents induction and expression of neuronal hyperexcitation. Collectively, these results, confirmed in studies using slice cultures, indicate that functional activity and perhaps functional upregulation of α7-nAChRs are necessary for production of Aβ-induced neuronal hyperexcitation and possibly AD pathogenesis. This novel mechanism involving α7-nAChRs in mediation of Aβ effects provides potentially new therapeutic targets for treatment of AD.