Early studies showed that the latency of P300 (P3) event related potential increases or diminishes when anticholinergic or cholinergic drugs are administered. We tested the hypothesis that new cholinesterase inhibitors like Donepezil (DPZ) may have an effect on the often abnormal P300 of patients with Alzheimer's Disease (AD), and therefore, that P300 recordings might simplify the evaluation of responses to cholinesterase inhibitor in patients with mild and moderate-severe AD. We evaluated 60 patients with AD: 30 patients with "mild" (Mini Mental State Examination 26-19) and 30 patients with "moderate-severe" (Mini Mental State Examination 18-10), according to the National Institute of Neurological and Communicative Disorders and Alzheimer's Disease and Related Disorders Association criteria in comparison with 40 age-matched controls. All subjects underwent P300 recordings and neuropsychologic examinations (Alzheimer's Disease Assessment Scale-Cognition and Wechsler Adult Intelligence Scale) during the 6-month follow-up. Patients were divided into four groups of 15 patients each: Group I DPZ (10 mg/day) and Group I Vitamin E (2000 IU/day) with "mild" AD; Group II DPZ and Group II Vitamin E with "moderate-severe" AD and same drug dosages. In patients treated with Vitamin E, we observed P3 latency increments (delta) by 11.8 +/- 1.8 ms in Group I and by 12.8 +/- 2.8 ms in Group II at 6 months; neuropsychologic test scores significantly worsened at 6 months (p < 0.001) in Group II patients. Donepezil induced significant P3 latency reductions (11.2 +/- 2.4 ms) in nine patients of Group I and all patients of Group II (16.1 +/- 4.0 ms), reaching a maximum at 3 months (23.2 +/- 2.7 ms). Alzheimer's Disease Assessment Scale-Cognition and Wechsler Adult Intelligence Scale scores improved during the same period, and the difference between Vitamin E and DPZ treated patients was highly significant for P3 (analysis of variance) and for P3-Alzheimer's Diseases Assessment Scale-Cognition (analysis of covariance) with p < 0.001 for pooled groups of patients with AD and Group II (DPZ) versus Group II (Vitamin E). Combined P3 event related potentials measurements, neuropsychologic test comparison evidences significant effects of DPZ in mild and in moderate-severe AD.