Nootropic acitivity of essential oil of Cymbopogon Citratus (EOCC) was studied in mice. Morries water maze employed to evaluate learning and memory parameters. Scopolamine (0.4 mg/kg, i.p.) was used to induce amnesia in mice. The essential oil (1gm/kg) significantly attenuated amnestic deficits induced by scopolamine (0.4 mg/kg, i.p.) and natural aging, also exhibited decreased escape latencies time (ELT) and increased Time Spend in Target Quadrant (TSTQ) significantly in the aged mice and scopolamine induced amnesic mice as compared with Piracetam (200 mg/kg, i.p.). To delineate the possible mechanism through which Cymbopogon Citratus elicits the anti-amnesic effects, we studied its influence on central cholinergic activity by estimating the whole brain acetylcholinesterase activity. Cymbopogon Citratus significantly decreased acetyl cholinesterase activity in mice. The results indicate that essential oil of Cymbopogon Citratus might prove to be a useful memory restorative agent in the treatment of dementia seen in elderly. The underlying mechanism of action can be attributed to its anti acetylcholinesterase property.