Although the hippocampus expresses nicotinic acetylcholine receptors (nAChRs) and receives cholinergic innervation, the functional roles of these receptors are not completely understood. Our results indicated that presynaptic nAChRs mediated a calcium influx that enhanced the release of both glutamate and GABA. Fura-2 detection of calcium in single mossy fiber presynaptic terminals indicated that nAChRs directly mediated a calcium influx. In hippocampal neurons in primary culture, both spontaneous vesicular release and evoked release of glutamate and GABA were enhanced by nicotine. The nicotinic current displayed rapid desensitization kinetics, and the response to nicotine was inhibited by alpha-bungarotoxin and methyllcaconitine, suggesting that nAChRs containing the alpha 7 subunit mediated the effect. Modulation of synaptic activity by presynaptic calcium influx may represent a physiological role of acetylcholine in the brain, as well as a mechanism of action of nicotine.