Episodic memory deficits are a core feature of neurodegenerative disorders. Muscarinic M₁ receptors play a critical role in modulating learning and memory and are highly expressed in the hippocampus. We examined the effect of GSK1034702, a potent M₁ receptor allosteric agonist, on cognitive function, and in particular episodic memory, in healthy smokers using the nicotine abstinence model of cognitive dysfunction. The study utilized a randomized, double-blind, placebo-controlled, cross-over design in which 20 male nicotine abstained smokers were tested following single doses of placebo, 4 and 8 mg GSK1034702. Compared to the baseline (nicotine on-state), nicotine abstinence showed statistical significance in reducing immediate (p=0.019) and delayed (p=0.02) recall. GSK1034702 (8 mg) significantly attenuated (i.e. improved) immediate recall (p=0.014) but not delayed recall. None of the other cognitive domains was modulated by either nicotine abstinence or GSK1034702. These findings suggest that stimulating M₁ receptor mediated neurotransmission in humans with GSK1034702 improves memory encoding potentially by modulating hippocampal function. Hence, selective M₁ receptor allosteric agonists may have therapeutic benefits in disorders of impaired learning including Alzheimer's disease.