Pharmacological activation of α7 nicotinic acetylcholine receptors (α7 nAChRs) may improve cognition in schizophrenia and Alzheimer’s disease. The present studies describe an integrated pharmacological analysis of the effects of FRM-17874, an analogue of encenicline, on α7 nAChRs in vitro and in behavioral and neurophysiological assays relevant to cognitive function. FRM-17874 demonstrated high affinity binding to human α7 nAChRs, displacing [3H]-methyllacaconitine (Ki=4.3nM). In Xenopus laevis oocytes expressing human α7 nAChRs, FRM-17874 acted as an agonist, evoking inward currents with an EC50 of 0.42μM. Lower concentrations of FRM-17874 (0.01–3nM) elicited no detectable current, but primed receptors to respond to sub-maximal concentrations of acetylcholine. FRM-17874 improved novel object recognition in rats, and enhanced memory acquisition and reversal learning in the mouse water T-maze. Neurophysiological correlates of cognitive effects of drug treatment, such as synaptic transmission, long-term potentiation, and hippocampal theta oscillation were also evaluated. Modulation of synaptic transmission and plasticity was observed in rat hippocampal slices at concentrations of 3.2 and 5nM. FRM-17874 showed a dose-dependent facilitation of stimulation-induced hippocampal theta oscillation in mice and rats. The FRM-17874 unbound brain concentration–response relationship for increased theta oscillation power was similar in both species, exhibited a biphasic pattern peaking around 3nM, and overlapped with active doses and exposures observed in cognition assays. In summary, behavioral and neurophysiological assays indicate a bell-shaped effective concentration range and this report represents the first attempt to explain the concentration–response function of α7 nAChR-mediated pro-cognitive effects in terms of receptor pharmacology.