Multiple lines of evidence, from molecular and cellular to epidemiological, have implicated nicotinic transmission in the pathology of Alzheimer's disease (AD) and Parkinson's disease (PD). This review article presents evidence for nicotinic acetylcholine receptor (nAChR)-mediated protection and the signal transduction involved in this mechanism. The data is based mainly on our studies using rat-cultured primary neurons. Nicotine-induced protection was blocked by an alpha7 nAChR antagonist, a phosphatidylinositol 3-kinase (PI3K) inhibitor, and an Src inhibitor. Levels of phosphorylated Akt, an effector of PI3K, Bcl-2 and Bcl-x were increased by nicotine administration. From these experimental data, our hypothesis for the mechanism of nAChR-mediated survival signal transduction is that the alpha7 nAChR stimulates the Src family, which activates PI3K to phosphorylate Akt, which subsequently transmits the signal to up-regulate Bcl-2 and Bcl-x. Up-regulation of Bcl-2 and Bcl-x could prevent cells from neuronal death induced by beta-amyloid (Abeta), glutamate and rotenone. These findings suggest that protective therapy with nAChR stimulation could delay the progress of neurodegenerative diseases such as AD and PD.