Brain inflammation is an underlying factor in the pathogenesis of Alzheimer's disease (AD) and epidemiological studies indicate that sustained use of non-steroidal anti-inflammatory drugs (NSAIDs) reduces the risk of AD and may delay its onset or slow its progression. Nevertheless, recent clinical trials have shown that NSAIDs do not alter the progression of AD. Neuroinflammation occurs in vulnerable regions of the AD brain where highly insoluble β-amyloid (Aβ) peptide deposits and neurofibrillary tangles, as well as damaged neurons and neurites, provide stimuli for inflammation. To elucidate the complex role of inflammation in neurodegenerative processes and the efficacy of NSAIDs in AD we developed an animal model of neuroinflammation/neurodegeneration in vivo. An "artificial plaque" was formed by injecting aggregated β-amyloid peptide (A(1-40) or A(1-42)) into the nucleus basalis magnocellularis (NBM) of rats. We investigated several aspects of the neuroinflammatory reaction around the "artificial plaque" such as microglia and astrocyte activation, production of proinflammatory compounds, activation of cyclooxigenase-2 (COX-2), p38 Mitogen Activated Protein Kinase (p38MAPK) and induction of inducible Nitric Oxide Synthase (iNOS). Finally, degeneration of cortically projecting cholinergic neurons was also evaluated by means of immunohistochemistry and microdialysis. We examined whether the attenuation of brain inflammatory reaction by NSAIDs and NO-donors may protect neurons against neurodegeneration. The data reported in this review show that in in vivo model of brain inflammation and neurodegeneration, the administration of NSAIDs and NO-donors prevent not only the inflammatory reaction, but also the cholinergic hypofunction. Our data may help elucidating the role of neuroinflammation in the pathogenesis of AD and the ability of anti-inflammatory agents to reduce the risk of developing AD and to slow its progression.