The hippocampus rapidly inhibits its response to repetitive auditory stimulation, an example of an auditory sensory gating mechanism involved in human psychopathology. The neuronal basis of this inhibitory gating mechanism has been investigated in rats. Activation of the alpha 7 nicotinic receptor is required. alpha 7 nicotinic receptor activation also releases nitric oxide in the hippocampus and blockade of nitric oxide synthase reduces inhibitory gating of auditory response. There has not been a direct demonstration that blockade of nitric oxide synthase specifically prevents alpha 7 nicotinic receptor activation of the inhibition of auditory response. Therefore, the goal of the present study was to determine whether this functional effect of alpha 7 receptor activation requires release of nitric oxide. Lesions of the fimbria-fornix disrupt auditory gating by preventing cholinergic stimulation of the hippocampus. Following recovery from this surgery, rats were administered 3-(2,4-dimethoxybenzylidene) anabaseine (DMXB-A; 10 mg/kg, sc), an agonist at the alpha 7 receptor. DMXB-A restored auditory gating in the fimbria-fornix-lesioned rats, indicating that activation of the alpha 7 nicotinic receptor alone is sufficient to restore auditory gating following lesions of the fimbria-fornix. However, intracerebroventricular infusion of N(omega)-nitro-L-arginine methyl ester, an inhibitor of nitric oxide synthase, blocked the DMXB-A-mediated restoration of auditory gating; infusion of the inactive D-enantiomer did not. Restoration of auditory gating by DMXB-A in the fimbria-fornix-lesioned rats was blocked by intracerebroventricular infusion of alpha-bungarotoxin, but not by mecamylamine or dihydro-beta-erythroidine. Together, these data support the hypothesis that nitric oxide mediates alpha 7 nicotinic receptor activation of gating of auditory response in rat hippocampus.