Impairment of sensory gating has been observed in schizophrenia patients for more than 3 decades.An auditory paradigm was used for sensory gating fMRI studies.Greater activation was found in the bilateral posterior hippocampus in SZ patients.The activation in hippocampus was reduced after acute administration of nicotine.Functional MRI studies have also been conducted using a smooth pursuit of eye movement (SPEM) paradigm.The results suggest that nicotine improved SPEM performance in SZ through cholinergic stimulation of the hippocampus and cingulate gyrus.Potential mechanisms include improved inhibitory function and attention.A nicotine-like compound, DMXBA, was found to have the similar effect in the hippocampus as acute administration of nicotine.It was indicated that the medication effect of DMXB-A was through the alpha7-nicotinic receptor.