Some of the thinking difficulties of Alzheimer's patients may be due to a deficiency in a brain chemical called acetylcholine, which helps transmit messages between nerve cells. Nefiracetam is a new drug that stimulates acetylcholine. This study will test whether Nefiracetam can safely improve memory, thinking and activities of daily living in patients with mild to moderate intellectual impairment due to Alzheimer's disease. Patients in the study must have a caregiver and designated representative. Candidates will be given a medical history and physical examination that includes a complete neurologic and neuropsychologic evaluation, blood tests, and an electrocardiogram. A chest X ray and magnetic resonance imaging (MRI) test will be done on patients who have not had these tests within the previous two years. During the 20-week study, each patient will take three pills twice a day for twenty weeks of either Nefiracetame or placebo (sugar pill). Neither the patients nor the doctors will know which patients are getting the drug and which are getting the placebo. Blood and urine tests will be done frequently throughout the study. Patients will be asked to have a spinal tap (on a voluntary basis) to measure the levels of drug in the spinal fluid, and a PET scan (a brain imaging test). At the end of the study, patients who feel they are doing well with no side effects from the drug (or placebo) may be given the option of continuing treatment for another seven months. Animal studies showed that Nefiracetam improved learning impairment and memory in rats with dementia. In a small study of humans, about one-fourth of patients who were given a low dose of the drug had improved intellectual function, and about one-half who received a higher dose improved.