Among the neuropathological features of Alzheimers disease (AD), are senile plaques and dysfunction of cholinergic neurotransmission are the major hallmarks. Senile plaques are formed by amyloid β-peptides (Aβ), derived from amyloidogenic processing of a larger protein named amyloid precursor protein (APP). It has been suggested and also proved that cholinergic system plays an important role in the cognitive function of the brain and its deficit correlates well with the cognitive impairment of AD. Aging is the most important risk factor for AD. In normal aging, cholinergic system undergoes degeneration. APP processing changes with aging, probably resulting in higher amyloidogenic products. The current clinical treatments for Alzheimers disease solely rely on cholinomimetic drugs i.e., acetylcholinesterase inhibitors. Recently, a great effort has been made to seek therapies that could reduce Aβ products by influencing APP processing. Through genetic engineering in cell lines and mice, in vitro and in vivo models for AD studies have been created. Experimental evidence obtained from the studies on these model organisms suggests that activity of cholinergic neurotransmission might have an impact on APP processing. On the other hand, the proteolytic products of APP have also been found able to influence the cholinergic system in both in vitro and in vivo models. To determine whether there exists a reciprocal interaction between cholinergic neurotransmission and APP processing is important for the development of new therapeutic strategies with high efficacy and specificity for AD.