Microglia perform both neuroprotective and neurotoxic functions in the brain, with this depending on their state of activation and their release of mediators. Upon P2X7 receptor stimulation, for example, microglia release small amounts of TNF, which protect neurons, whereas LPS causes massive TNF release leading to neuroinflammation. Here we report that, in rat primary cultured microglia, nicotine enhances P2X7 receptor-mediated TNF release, whilst suppressing LPS-induced TNF release but without affecting TNF mRNA expression via activation of α7 nicotinic acetylcholine receptors (α7 nAChRs). In microglia, nicotine elicited a transient increase in intracellular Ca2+ levels, which was abolished by specific blockers of α7 nAChRs. However, this response was independent of extracellular Ca2+ and blocked by U73122, an inhibitor of phospholipase C (PLC), and xestospongin C, a blocker of the IP3 receptor. Repeated experiments showed that currents were not detected in nicotine-stimulated microglia. Moreover, nicotine modulation of LPS-induced TNF release was also blocked by xestospongin C. Upon LPS stimulation, inhibition of TNF release by nicotine was associated with the suppression of JNK and p38 MAP kinase activation, which regulate the post-transcriptional steps of TNF synthesis. In contrast, nicotine did not alter any MAP kinase activation, but enhanced Ca2+ response in P2X7 receptor-activated microglia. In conclusion, microglial α7 nAChRs might drive a signaling process involving the activation of PLC and Ca2+ release from intracellular Ca2+ stores, rather than function as conventional ion channels. This novel α7 nAChR signal may be involved in the nicotine modification of microglia activation towards a neuroprotective role by suppressing the inflammatory state and strengthening the protective function. © 2006 Wiley-Liss, Inc.