E2020 (R,S)-1-benzyl-4-[(5,6-dimethoxy-1-indanon)-2-yl]methyl)piperidine hydrochloride is a piperidine-based acetylcholinesterase (AChE) inhibitor that was approved for the treatment of Alzheimer's disease in the United States. Structure-activity studies of this class of inhibitors have indicated that both the benzoyl containing functionality and the N-benzylpiperidine moiety are the key features for binding and inhibition of AChE. In the present study, the interaction of E2020 with cholinesterases (ChEs) with known sequence differences, was examined in more detail by measuring the inhibition constants with Torpedo AChE, fetal bovine serum AChE, human butyrylcholinesterase (BChE), and equine BChE. The basis for particular residues conferring selectivity was then confirmed by using site-specific mutants of the implicated residue in two template enzymes. Differences in the reactivity of E2020 toward AChE and BChE (200- to 400-fold) show that residues at the peripheral anionic site such as Asp74(72), Tyr72(70), Tyr124(121), and Trp286(279) in mammalian AChE may be important in the binding of E2020 to AChE. Site-directed mutagenesis studies using mouse AChE showed that these residues contribute to the stabilization energy for the AChE-E2020 complex. However, replacement of Ala277(Trp279) with Trp in human BChE does not affect the binding of E2020 to BChE. Molecular modeling studies suggest that E2020 interacts with the active-site and the peripheral anionic site in AChE, but in the case of BChE, as the gorge is larger, E2020 cannot simultaneously interact at both sites. The observation that the KI value for mutant AChE in which Ala replaced Trp286 is similar to that for wild-type BChE, further confirms our hypothesis.