Inhibition of brain acetylcholinesterase (AChE) can provide relief from the cognitive loss associated with Alzheimer's disease (AD). However, unwanted peripheral side effects often limit the usefulness of the available anticholinesterases. Recently, we identified a dihydroquinazoline compound, PD 142676 (CI 1002) that is a potent anticholinesterase and a functional muscarinic antagonist at higher concentrations. Peripherally, PD 142676, unlike other anticholinesterases, inhibits gastrointestinal motility in rats, an effect consistent with its muscarinic antagonist properties. Centrally, the compound acts as a cholinomimetic. In rats, PD 142676 decreases core body temperature. It also increases neocortical arousal, as measured by quantitative electroencephalography, and cortical acetylcholine levels, measured by in vivo microdialysis. The compound improves the performance of C57/B10j mice in a water maze task and of aged rhesus monkeys in a delayed match-to-sample task involving short-term memory. The combined effect of AChE inhibition and muscarinic antagonism distinguishes PD 142676 from other anticholinesterases, and may be useful in treating the cognitive dysfunction of AD and produce fewer peripheral side effects.