Loss of cholinergic neurons and/or dysfunction of the glutamatergic system in the central nervous system cause learning impairment in experimental Alzheimer's (Alz) disease animals and Alz patients. Furthermore, the impaired cholinergic system is likely implicated in depressive behaviors in Alz patients. Neurogenesis persistently occurs in the forebrain subventricular zone (SVZ) and hippocampal subgranular zone (SGZ) in rodent and human brains. Notably, impaired neurogenesis in those regions is implicated not only in memory deficits but also in depressive behaviors. We have recently found that olfactory bulbectomized (OBX) mice reveal memory impairment and depressive behaviors. Using this attractive OBX mice model, we discovered a novel cognitive enhancer, spiro[imidazo[1,2-a]pyridine-3,2-indan]-2(3H)-one (ZSET1446/ST101), that is a new azaindolizinone derivative without inhibitory action on acetylcholine esterase (AChE). Interestingly, ZSET1446 improved learning and memory by potentiating nicotine-induced ACh release in the hippocampus of amyloid-beta infused rats. In addition, ZSET1446 restored OBX-induced cognitive deficits in mice. Furthermore, chronic ZSET1446 administration significantly rescues decreased neuronal precursor cell proliferation seen in the dentate gyrus of OBX mice. Consistent with enhanced neurogenesis, chronic ZSET1446 administration improved depressive behavior assessed using the tail suspension test in OBX mice. Protein kinase B (Akt) and extracellular signal-regulated kinase pathways likely mediate ZSET1446-induced neurogenesis. These results suggest that ZSET1446 action via stimulation of the cholinergic system elicits improvement of the depression and cognitive impairment observed in Alz disease patients.