Multiple lines of evidence have implicated that nicotinic acetylcholine receptor (nAChR)may bean important therapeutic target for the treatment of Alzheimer's disease (AD). Although thereare reports suggesting a link between alpha7 nAChR subtype and AD, there has been little reporton the mechanism. The present study investigates whether and how α7 nAChR activationaffects APP695 processing in SH-EP1 cell model. Cell line co-expressing α7 nAChR gene andhuman amyloid precursor protein 695 (hAPP695) gene were constructed by stable transfection.Expression of β-amyloid, α-form of secreted APP (αAPPs) and APP1695 was measured by ELISA,western blotting and real-time PCR respectively. Additionally, α, β, and γ-secretase activitieswere also analyzed in constructed SH-EP1-α7 nAChR-hAPP695 cell line. The results showed thatSH-EP1-α7 nAChR-hAPP695 cell line, expressing both hAPP695 gene and α7 nAChR subtype gene,was constructed successfully. The secreted Aβ was decreased and αAPPs was significantlyincreased by non-selective nAChR agonist nicotine (10μM) and specific α7 nAChR agonist GTS-21 (1μM), and APP expression was not affected. Furthermore, specific α7 nAChR antagonistmethyllycaconitine (MLA) reversed the alterations induced by activation of α7 nAChR. CTF-α wasincreased and CTF-γ was decreased when treated with nicotine (10μM). In addition, the resultsof enymatic activity analysis showed that nicotine (1μM) and GTS-21 (0.1, 1μM) decreased γ-secretase activity, but has no effects on α-secretase activity and β-secretase activity. Our findingsdemonstrate that, through regulating γ-secretase activity, α7 nAChR activation reduces APPprocessing in amyloidogenic pathway, and at the same time enhances APP processing in nonamyloidogenicpathway. The constructed SH-EP1-α7 nAChR-hAPP695 cell line might be usefulfor screening specific nAChR agonists against AD.