The effects of the acetylcholinesterase inhibitors physostigmine and tacrine on alpha4beta2 and alpha4beta4 subtypes of neuronal nicotinic acetylcholine (ACh) receptors, expressed in Xenopus laevis oocytes, have been investigated. In voltage-clamp experiments low concentrations of physostigmine and tacrine potentiate ion currents induced by low concentrations of ACh, whereas at high concentrations they inhibit ACh-induced ion currents. These dual effects result in bell-shaped concentration-effect curves. Physostigmine and tacrine, by themselves, do not act as nicotinic receptor againsts. The larger potentiation is observed with 10 microM: physostigmine on alpha4beta4 nicotinic receptors and amounts to 70% at 1 microM: ACh. The mechanism underlying the effects of physostigmine on alpha4beta4 ACh receptors has been investigated in detail. Potentiation of ACh-induced ion current by low concentrations of physostigmine is surmounted at elevated concentrations of ACh, indicating that this is a competitive effect. Conversely, inhibition of ACh-induced ion current by high concentrations of physostigmine is not surmounted at high concentrations of ACh, and this effect appears mainly due to noncompetitive, voltage-dependent ion channel block. Radioligand binding experiments demonstrating displacement of the nicotinic receptor agonist (125)I-epibatidine from its recognition sites on alpha4beta4 ACh receptors by physostigmine confirm that physostigmine is a competitive ligand at these receptors. A two-site equilibrium receptor occupation model, combined with noncompetitive ion channel block, accounts for the dual effects of physostigmine and tacrine on ACh-induced ion currents. It is concluded that these acetylcholinesterase-inhibiting drugs interact with the ACh recognition sites and are coagonists of ACh on alpha4-containing nicotinic ACh receptors.