The α7-nicotinic acetylcholine receptor (α7nAChR) is a key protein in the cholinergic anti-inflammatory pathway (CAP) that links the nervous and immune systems. Initially, the pathway was discovered based on the observation that vagal nerve stimulation (VNS) reduced the systemic inflammatory response in septic animals. Subsequent studies form a foundation for the leading hypothesis about the central role of the spleen in CAP activation. VNS evokes noradrenergic stimulation of ACh release from T cells in the spleen, which in turn activates α7nAChRs on the surface of macrophages. α7nAChR-mediated signaling in macrophages reduces inflammatory cytokine secretion and modifies apoptosis, proliferation, and macrophage polarization, eventually reducing the systemic inflammatory response. A protective role of the CAP has been demonstrated in preclinical studies for multiple diseases including sepsis, metabolic disease, cardiovascular diseases, arthritis, Crohn’s disease, ulcerative colitis, endometriosis, and potentially COVID-19, sparking interest in using bioelectronic and pharmacological approaches to target α7nAChRs for treating inflammatory conditions in patients. Despite a keen interest, many aspects of the cholinergic pathway are still unknown. α7nAChRs are expressed on many other subsets of immune cells that can affect the development of inflammation differently. There are also other sources of ACh that modify immune cell functions. How the interplay of ACh and α7nAChR on different cells and in various tissues contributes to the anti-inflammatory responses requires additional study. This review provides an update on basic and translational studies of the CAP in inflammatory diseases, the relevant pharmacology of α7nAChR-activated drugs and raises some questions that require further investigation.