We examined the possibility that direct stimulation of the angiotensin II type 2 (AT2) receptor by a newly generated direct AT2 receptor agonist, Compound 21 (C21), enhances cognitive function. Treatment with C21 intraperitoneal injection for 2 weeks significantly enhanced cognitive function evaluated by the Morris water maze test in C57BL6 mice, but this effect was not observed in AT2 receptor-deficient mice. However, C21-induced cognitive enhancement in C57BL6 mice was attenuated by coadministration of icatibant, a bradykinin B2 receptor antagonist. Administration of C21 dose dependently increased cerebral blood flow assessed by laser speckle flowmetry and hippocampal field-excitatory postsynaptic potential (f-EPSP) determined by electrophysiological techniques in C57BL6 mice. Furthermore, activation of the AT2 receptor by C21 promoted neurite outgrowth of cultured hippocampal neurons prepared from fetal transgenic mice expressing green fluorescent protein. Finally, we investigated the pathologic relevance of C21 for spatial learning using an Alzheimer's disease mouse model with intracerebroventricular injection of amyloid-β (1 to 40). We observed that treatment with C21 prevented cognitive decline in this model. These results suggest that a direct AT2 receptor agonist, C21, enhances cognitive function at least owing to an increase in CBF, enhancement of f-EPSP, and neurite outgrowth in hippocampal neurons.