In this report we provide evidence that neuronal nicotinic acetylcholine receptors (nAChRs) are present on hippocampal astrocytes and their activation produces rapid currents and calcium transients. Our data indicate that these responses obtained from astrocytes are primarily mediated by an AChR subtype that is functionally blocked by alpha-bungarotoxin (alpha Bgt) and contains the alpha7 subunit (alpha Bgt-AChRs). Furthermore, their action is unusual in that they effectively increase intracellular free calcium concentrations by activating calcium-induced calcium release from intracellular stores, triggered by influx through the receptor channels. These results reveal a mechanism by which alpha Bgt-AChRs on astrocytes can efficiently modulate calcium signaling in the central nervous system in a manner distinct from that observed with these receptors on neurons.