Previously, we showed that in rat cortical neurons, chronic donepezil treatment (10 μM, 4 days) up-regulates nicotinic receptors (nAChR) and makes neurons more sensitive to the neuroprotective effect of donepezil. Here we examined the mechanism of donepezil-induced neuroprotection in neurons chronically treated with donepezil. The mechanism of neuroprotection was examined under different conditions of exposure to glutamate, acute and moderate, that induce cell death associated with necrotic and apoptotic cell death, respectively. Concomitant treatment with antagonists of nAChRs but not muscarinic receptors inhibited donepezil pretreatment-induced neuroprotection against acute glutamate treatment-induced death. Donepezil pretreatment prevented acute glutamate- and ionomycin-induced neurotoxicity, but not S-nitrosocysteine-induced neurotoxicity, suggesting that donepezil protects neurons via nAChR at levels before nitric oxide synthase activation against acute glutamate neurotoxicity. Concomitant treatment with antagonists of nAChR or phosphatidylinositol 3-kinase (PI3K) signaling inhibitors significantly inhibited neuroprotection against moderate glutamate neurotoxicity and decreased the phosphorylation level of Akt. Neuroprotection was also inhibited by treatment with inhibitor of mitogen-activated protein kinase (MAPK) kinase. These results suggest that donepezil protects neurons against moderate glutamate neurotoxicity via nAChR-PI3K-Akt and MAPK signaling pathways. This study provides novel insight into the mechanism of donepezil-induced neuroprotection that involves nAChR up-regulation.