Cortical cholinergic loss and amyloidogenic processing of the β-amyloid precursor protein (APP), may functionally interact in Alzheimer's disease. However, it is still unknown whether biological restoration of regulatory cholinergic inputs affects APP metabolism in vivo. Rats immunolesioned with 192 IgG-saporin exhibited severe acquisition deficits in place navigation that were paralleled by a dramatic loss of terminal cholinergic innervation and by marked changes in the regional expression of APP-like immunoreactivity. Moreover, in these animals, we observed a drastic reduction of soluble APP (sAPP) and a concomitant increase of the unsoluble, membrane-bound fraction (mAPP). Notably, at about 6 months post-surgery, lesioned animals implanted with reinnervating cholinergic-rich septal tissue grafts exhibited fairly normal spatial navigation abilities, as well as cortical and hippocampal APP levels that were restored up to normal or near-normal values. APP levels correlated significantly with lesion- or graft-induced changes in cholinergic innervation density, and both these measures correlated with performance in the spatial navigation task. Thus, integrity of ascending cholinergic inputs may be required to prevent amyloidogenic processing of APP in vivo and to modulate cognitive performance.