The mechanisms responsible for cholinergic dysfunction associated learning and memory impairment during hypoxia are not well-understood. However it is known that inflammatory mediators like inducible nitric oxide synthase (iNOS) hamper the functions of cholinergic neurons. In this present experiment we made an effort to study the iNOS expression mediated retrograde and anterograde memory impairment in Balb/c mice following acute hypobaric hypoxia (at an altitude of 23,000ft for 6h) using elevated plus maze and passive avoidance step-through tasks. Our results demonstrated that hypoxia transiently impairs the retrograde memory without affecting the anterograde memory functions, accompanied with a substantial rise in iNOS expression and nitric oxide levels in cerebral cortex on days 2 and 3 post hypoxia. Treatment with aminoguanidine (iNOS inhibitor ), resulted in down-regulation of the iNOS expression, attenuation of the surge of nitric oxide (NO) in cerebral cortex and reversal of retrograde memory impairment due to hypoxia. Moreover the reduced AChE activity and elevated lipid peroxidation in cerebral cortex were evident during post hypoxia re-oxygenation period, which was not observed in the hippocampus. Additionally, NO donor spermine NONOate could inhibit the AChE activity in brain homogenates in a concentration-dependent manner, which further substantiate that nitric oxide produced during post hypoxia re-oxygenation, primarily contributes to the observed inhibition of cortical AChE activity. Based on these experiments we hypothesize that the NO burst as a result of iNOS upregulation during hypoxia interrupts the memory consolidation by altering the cholinergic functions.