Galantamine, currently used in Japan for the treatment of Alzheimer's disease, may improve cognitive dysfunction and psychiatric illness in schizophrenia, major depression, bipolar disorder and alcohol abuse. It is a rather weak acetylcholinesterase inhibitor in vitro, but has additional allosteric potentiating effects at nicotinic receptors. We have found that galantamine increased acetylcholine levels in the brain. This suggests that the pharmacological effects of galantamine are mediated by not only nicotinic receptors but also muscarinic receptors. We found that galantamine, but not donepezil, improved prepulse inhibition (PPI) deficits in isolation-reared mice, although both drugs improved PPI deficits in an apomorphine model. The difference in the effects on PPI deficits between galantamine and donepezil may be explained by the effects on muscarinic receptors. This review summarizes the pharmacological profiles of galantamine, focusing on the importance of muscarinic receptors.