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.