Clozapine is an effective antipsychotic drug, but its effects on cognitive function are unclear. Previously, we found that clozapine caused a working memory deficit, which was reversed by nicotine. Hippocampal systems are important in determining clozapine effect on memory. In the current study, the memory effects of clozapine and nicotine administration were determined in rats with lesions of the fimbria-fornix, a fiber bundle which carries cholinergic and other projections between the septum and the hippocampus. Female Sprague-Dawley rats were trained on a win-shift procedure in the radial-arm maze, in which each arm entry was rewarded once per session. Then, 13 rats received bilateral knife-cut lesions of the fimbria-fornix, while 14 rats underwent sham surgery. The rats were tested after subcutaneous injections with combinations of clozapine (0 and 1.25 mg/kg) and nicotine (0, 0.2, and 0.4 mg/kg). In sham-operated rats, clozapine caused a significant (P<0.005) working memory impairment. Fimbria-fornix lesions also caused a significant (P<0.05) memory impairment. Interestingly, clozapine had the opposite effect on working memory in the lesioned vs sham-operated rats. In contrast to its effects in controls, clozapine (1.25 mg/kg) significantly (P<0.05) attenuated the working memory deficit caused by fimbria-fornix lesions. Nicotine (0.2 mg/kg) did not quite significantly improve memory in lesioned rats. The effects of clozapine and nicotine were not additive in the lesioned rats. This study demonstrates the efficacy of clozapine in improving working memory in fimbria-fornix-lesioned rats, whereas it causes impairments in intact rats. Therapeutic treatment with clozapine in people with malfunctions of the hippocampus such as seen in schizophrenia may improve cognitive performance, whereas the same doses of clozapine may impair memory in individuals without hippocampal malfunction.