Restorative potential of fetal neural transplantation in colchicine induced neurodegeneration was studied in rats; where colchicine (2.5mg per site) was administered bilaterally into the hippocampus followed by bilateral infusions of fetal neural cell suspension rich in cholinergic neurons as single macro- or multiple micro-transplants in the hippocampal region 3 weeks post-colchicine (2.5mg per site) lesion. Animals were studied for neuro behavioural and neurochemical recovery at 4 and 24 weeks post-transplantation and electrophysiological (single cell recording) and immunohistochemical parameters, choline acetyl transferase (ChAT) expression was studied in hippocampus at 24 weeks post-transplantation. Colchicine lesioned rats receiving single macro- or multiple micro-transplants exhibited significant restoration in cognitive dysfunction caused by colchicine after 4 weeks of transplantation which remain persistent in multiple micro-transplanted group upto 24 weeks post-transplantation, whereas, single macro-transplanted animals did not exhibit any significant recovery. Neurochemical studies revealed significant restoration in acetylcholine esterase activity and cholinergic (muscarinic) receptor binding after 24 weeks post-transplantation as compared to 4 weeks post-transplantation in multiple micro-transplanted group. Single cell recording studied at 24 weeks post-transplantation exhibited significant restoration in firing rates when compared with lesioned group. The viability of cholinergic fibre at transplanted sites has further been confirmed by increase in ChAT immuno positivity in hippocampal region using monoclonal antibody and quantified using image analyser Leica Qwin 500 software. The results suggest that intra-hippocampal multiple site cholinergic rich transplants provide better and long term restoration in the cholinergic deficits induced by colchicine lesion as compared to single site macro-transplantation.