Nicotinic acetylcholine receptors and N-methyl-D-aspartate (NMDA) receptors are known to be down-regulated in the brain of Alzheimer's disease patients. We have previously demonstrated that the nootropic drug nefiracetam potentiates the activity of both nicotinic acetylcholine and NMDA receptors and that nefiracetam modulates the glycine binding site of the NMDA receptor. Because the NMDA receptor is also modulated by Mg2+ and protein kinases, we studied their roles in nefiracetam action on the NMDA receptor by the whole-cell patch-clamp technique and immunoblotting analysis using rat cortical or hippocampal neurons in primary culture. The nefiracetam potentiation of NMDA currents was inhibited by the protein kinase C (PKC) inhibitor chelerythrine, but not by the protein kinase A (PKA) inhibitor N-[2-(4-bromocinnamylamino) ethyl]-5-isoquinoline (H89). In immunoblotting analysis, nefiracetam treatment increased the PKCα activity with a bell-shaped dose-response relationship peaking at 10 nM, thereby increasing phosphorylation of PKC substrate and NMDA receptor. Such an increase in PKCα-mediated phosphorylation was prevented by chelerythine. Nefiracetam treatment did not affect the PKA activity. Analysis of the current-voltage relationships revealed that nefiracetam at 10 nM largely eliminated voltage-dependent Mg2+ block and that this action of nefiracetam was sensitive to PKC inhibition. It was concluded that nefiracetam potentiated NMDA currents not by acting as a partial agonist but by interacting with PKC, allosterically enhancing glycine binding, and attenuating voltage-dependent Mg2+ block.