Type 2 diabetes has become a pervasive public health problem. The etiology of the disease has not been fully defined but appears to involve abnormalities in peripheral and central nervous system pathways, as well as prominent inflammatory components. Because nicotinic acetylcholine receptors (nAChRs) are known to interact with anti-inflammatory pathways and have been implicated in control of appetite and body weight, as well as lipid and energy metabolism, we examined their role in modulating biological parameters associated with the disease. In a model of type 2 diabetes, the homozygous leptin-resistant db/db obese mouse, we measured the effects of a novel alpha7 nAChR-selective agonist [5-methyl-N-[2-(pyridin-3-ylmethyl)-1-azabicyclo[2.2.2]oct-3-yl]thiophene-2-carboxamide (TC-7020)] on body mass, glucose and lipid metabolism, and proinflammatory cytokines. Oral administration of TC-7020 reduced weight gain and food intake, reduced elevated glucose and glycated hemoglobin levels, and lowered elevated plasma levels of triglycerides and the proinflammatory cytokine tumor necrosis factor-alpha. These changes were reversed by the alpha7-selective antagonist methyllycaconitine, confirming the involvement of alpha7 nAChRs. Prevention of weight gain, decreased food intake, and normalization of glucose levels were also blocked by the Janus kinase 2 (JAK2) inhibitor alpha-cyano-(3,4-dihydroxy)-N-benzylcinnamide (AG-490), suggesting that these effects involve linkage of alpha7 nAChRs to the JAK2-signal transducer and activator of transcription 3 signaling pathway. The results show that alpha7 nAChRs play a central role in regulating biological parameters associated with diabetes and support the potential of targeting these receptors as a new therapeutic strategy for treatment.