The commonly used beverage and psychostimulant caffeine is known to inhibit human acetylcholinesterase enzyme. This pharmacological activity of caffeine is partly responsible for its cognition enhancing properties. However, the exact mechanisms of its binding to human cholinesterases (acetyl and butyrylcholinesterase; hAChE and hBuChE) are not well known. In this study, we investigated the cholinesterase inhibition by the xanthine derivatives caffeine, pentoxifylline, and propentofylline. Among them, propentofylline was the most potent AChE inhibitor (hAChE IC₅₀=6.40 μM). The hAChE inhibitory potency was of the order: caffeine (hAChE IC₅₀=7.25 μM)<pentoxifylline (hAChE IC₅₀=6.60 μM) ≤ propentofylline (hAChE IC₅₀=6.40 μM). These compounds were less potent relative to the reference agent donepezil (hAChE IC₅₀=0.04 μM). Moreover, they all exhibited selective inhibition of hAChE with no inhibition of hBuChE (IC₅₀>50 μM) relative to the reference agent donepezil (hBuChE IC₅₀=13.60 μM). Molecular modeling investigations indicate that caffeine binds primarily in the catalytic site (Ser203, Glu334 and His447) region of hAChE whereas pentoxifylline and propentofylline are able to bind to both the catalytic site and peripheral anionic site due to their increased bulk/size, thereby exhibiting superior AChE inhibition relative to caffeine. In contrast, their lack of hBuChE inhibition is due to a larger binding site and lack of key aromatic amino acids. In summary, our study has important implications in the development of novel caffeine derivatives as selective AChE inhibitors with potential application as cognitive enhancers and to treat various forms of dementia.