Xanomeline is a novel muscarinic receptor agonist relatively devoid of parasympathomimetic side effects. Xanomeline had high affinity for muscarinic receptors and much lower affinity for a variety of other neuronal receptors in radioligand binding assays. Functional studies in cell lines transfected with the muscarinic receptor subtypes demonstrated that xanomeline had higher potency and efficacy for m1 and m4 receptors than m2, m3, and m5 receptor subtypes. Similarly, in isolated tissue studies, xanomeline had higher potency and efficacy for M1 receptors in rabbit vas deferens than at M2 receptors in guinea pig atria or M3 receptors in guinea pig bladder. Secretion of soluble amyloid precursor protein from m1 cell lines was potently stimulated by xanomeline. In vivo, xanomeline robustly stimulated phosphoinositide hydrolysis in brain, consistent with m1 agonism. Xanomeline produced modest increases in brain acetylcholine levels and did not produce bradycardia, suggesting little, if any, m2 agonist activity in vivo. Additionally, xanomeline did not induce nonselective cholinergic agonist side effects such as tremor, hypothermia and salivation. In animal behavior studies, xanomeline reduced locomotion and blocked memory deficits that were induced by a muscarinic antagonist in a passive avoidance paradigm. Xanomeline was found to be safe and reasonably well tolerated in safety studies in humans. In a placebo controlled double blind clinical trial of 6 months duration, xanomeline halted cognitive decline in patients with Alzheimer's disease. Furthermore, behavioral symptoms associated with Alzheimer's disease such as hallucinations, delusions and vocal outbursts were significantly decreased by xanomeline treatment. Additional clinical trials are under way to assess the novel therapeutic effects of xanomeline. Drug Dev. Res. 40:158–170, 1997. © 1997 Wiley‐Liss, Inc.