The prevalence of dementia is growing in developed countries where elderly patients are increasing in numbers. Neurotransmission modulation is one approach to the treatment of dementia. Cholinergic precursors, anticholinesterases, nicotine receptor agonists and muscarinic M(2) receptor antagonists are agents that enhance cholinergic neurotransmission and that depend on having some intact cholinergic innervation to be effective in the treatment of dementia. The cholinergic precursor choline alfoscerate may be emerging as a potential useful drug in the treatment of dementia, with few adverse effects. Of the anticholinesterases, donepezil, in addition to having a similar efficacy to tacrine in mild-to-moderate Alzheimer's disease (AD), appears to have major advantages; its use is associated with lower drop-out rates in clinical trials, a lower incidence of cholinergic-like side effects and no liver toxicity. Rivastigmine is efficacious in the treatment in dementia with Lewy bodies, a condition in which the other anticholinesterases have not been tested extensively to date. Galantamine is an anticholinesterase and also acts as an allosteric potentiating modulator at nicotinic receptors to increase the release of acetylcholine. Pooled data from clinical trials of patients with mild-to-moderate AD suggest that the benefits and safety profile of galantamine are similar to those of the anticholinesterases. Selective nicotine receptor agonists are being developed that enhance cognitive performance without influencing autonomic and skeletal muscle function, but these have not yet entered clinical trial for dementia. Unlike the cholinergic enhancers, the M(1) receptor agonists do not depend upon intact cholinergic nerves but on intact M(1) receptors for their action, which are mainly preserved in AD and dementia with Lewy bodies. The M(1) receptor-selective agonists developed to date have shown limited efficacy in clinical trials and have a high incidence of side effects. A major recent advancement in the treatment of dementia is memantine, a non-competitive antagonist at NMDA receptors. Memantine is beneficial in the treatment of severe and moderate-to-severe AD and may also be of some benefit in the treatment of mild-to-moderate vascular dementia. Drugs that modulate 5-HT, somatostatin and noradrenergic neurotransmission are also being considered for the treatment of dementia.