The cholinergic nervous system attenuates the production of pro-inflammatory cytokines and inhibits inflammatory processes. Hence, in animal models of intestinal inflammation, such as postoperative ileus and dextran sulfate sodium-induced colitis, vagus nerve stimulation ameliorates disease activity. On the other hand, in infectious models of microbial peritonitis, vagus nerve activation seemingly acts counteractive; it impairs bacterial clearance and increases mortality. It is originally indicated that the key mediator of the cholinergic anti-inflammatory pathway, acetylcholine (ACh), inhibits cytokine release directly via the alpha7 nicotinic ACh receptor (nAChR) expressed on macrophages. However, more recent data also point towards the vagus nerve as an indirect modulator of innate inflammatory processes, exerting its anti-inflammatory effects via postganglionic modulation of immune cells in primary immune organs. This review discusses advances in the possible mechanisms by which the vagus nerve can mediate the immune response, and the role of nAChR activation and signalling on macrophages and other immune cells.