The α7 subtype of the nicotinic acetylcholine receptor (nAChR) is a target of considerable interest in CNS drug discovery, in part due to its implication in diseases of unmet medical need such as schizophrenia and Alzheimers disease. Pharmacological distinction of this subtype from other nAChRs is exemplified by antagonists such as α-bungarotoxin and methyllycaconitine, and more recently by agonists that have emerged from various structural classes. Increasing evidence, both preclinical and clinical, has also demonstrated that α7 nAChR agonists and partial agonists can lead to improvements in cognitive performance. An attractive alternative approach to modulating α7 nAChR function is to enhance the effects of the endogenous neurotransmitter acetylcholine (ACh) through positive allosteric modulation (PAM). This class of compounds - positive allosteric modulators (PAMs) - could selectively modulate the activity of ACh at α7 nAChRs in a manner that may have significant advantages over indiscriminate and direct activation of nAChRs by nicotine/nicotinic agonists or by acetylcholinesterase inhibitors. Validation of the α7 nAChR-selective PAM approach requires the identification of potent and selective compounds. Initially identified nAChR allosteric modulators, including 5-hydroxyindole (5-HI), galantamine, bovine serum albumin, and SLURP-1, are weak and nonselective. More recently, potent and α7 nAChR-selective PAMs belonging to diverse chemotypes have emerged and are beginning to be optimized as tools for concept validation in preclinical models and in the clinic. This review summarizes the current status of nAChR-selective PAMs, from patents and published literature, and their potential for the treatment of cognitive deficits associated with neuropsychiatric and neurodegenerative disorders and other diseases.