Lynx1 is a GPI-tethered protein colocalized with nicotinic acetylcholine receptors (nAChRs) in the brain areas important for learning and memory. Previously we demonstrated that at low micromolar concentrations the water-soluble Lynx1 variant lacking GPI-anchor (ws-Lynx1) acts on α7-nAChRs as a positive allosteric modulator. We hypothesized that ws-Lynx1 could be used for improvement of cognitive processes dependent on nAChRs. Here we showed that 2 µM ws-Lynx1 increased the acetylcholine-evoked current at α7-nAChRs in the rat primary visual cortex L1 interneurons. At higher concentrations ws-Lynx1 inhibits α7-nAChRs expressed in X. laevis oocytes with IC ~50 µM. In C57BL/6 mice, ws-Lynx1 penetrated the blood-brain barrier upon intranasal administration and accumulated in the cortex, hippocampus, and cerebellum. Chronic ws-Lynx1 treatment prevented the olfactory memory and motor learning impairment induced by the α7-nAChRs inhibitor methyllycaconitine (MLA). Enhanced long-term potentiation (LTP) and increased paired-pulse facilitation ratio were observed in the hippocampal slices incubated with ws-Lynx1 and in the slices from ws-Lynx1-treated mice. LTP blockade observed in MLA-treated mice was abolished by ws-Lynx1 co-administration. To understand the mechanism of ws-Lynx1 action, we studied the interaction of ws-Lynx1 and MLA at α7-nAChRs, measured the basal concentrations of endogenous Lynx1 and the α7 nAChR subunit and their association in the mouse brain . Our findings suggest that endogenous Lynx1 limits α7-nAChRs activation in the adult brain. Ws-Lynx1 partially displaces Lynx1 causing positive modulation of α7-nAChRs and enhancement of synaptic plasticity. Ws-Lynx1 and similar compounds may constitute useful hits for treatment of cognitive deficits associated with the cholinergic system dysfunction.