The hippocampus, a key structure for learning and memory processes, receives an important cholinergic innervation and is densely packed with a variety of nicotinic acetylcholine receptors (nAChRs) localized on principal cells and interneurons. Activation of these receptors by nicotine or endogenously released acetylcholine enhances activity-dependent synaptic plasticity processes. Deficits in the cholinergic system produce impairment of cognitive functions that are particularly relevant during senescence and in age-related neurodegenerative pathologies. In particular, Alzheimer's disease (AD) is characterized by a selective loss of cholinergic neurons in the basal forebrain and nAChRs in particular regions controlling memory processes such as the cortex and the hippocampus. Field excitatory postsynaptic potentials (fEPSPs) were recorded in order to examine whether nicotine was able to regulate LTP induction at CA3-CA1 synapses in hippocampal slices from adult anti-NGF transgenic mice (AD11), a comprehensive animal model of AD, in which cholinergic deficits due to NGF depletion are accompanied by progressive Alzheimer-like neurodegeneration. Both AD11 and WT mice exhibited short- and long-lasting synaptic plasticity processes that were boosted by nicotine. Nicotine effects on WT and AD11 mice were mediated by both alpha7 and beta2 containing nAChRs. In the presence of GABAA receptor antagonists, nicotine failed to boost synaptic plasticity in AD11 but not in WT mice, indicating that in anti-NGF transgenic mice GABAergic interneurons are able to compensate for the deficit in cholinergic modulation of glutamatergic transmission. This compensation may occur at different levels and may involve the reorganization of the GABAergic circuit. However, patch clamp whole cell recordings from principal cells failed to reveal any change in spontaneous release of GABA following pressure application of nicotine to nearby GABAergic interneurons. Altogether these experiments indicate that in AD11 mice a rearrangement of the GABAergic circuit can "rescue" nicotine-induced potentiation of synaptic plasticity. This may be relevant for developing proper therapeutic tools useful for the treatment of AD.