It is used to improve muscle tone in people with myasthenia gravis and routinely, in anesthesia at the end of an operation, to reverse the effects of non-depolarizing muscle relaxants such as rocuronium and vecuronium, usually in a dose of 25 to 50 mcg per kilogram.

It can also be used for urinary retention resulting from general anesthesia and to treat curariform drug toxicity.

Another indication for use is the Ogilvie syndrome which is a pseudoobstruction of the colon in critically ill patients.

Historically, it has been used as a test for early pregnancy. In a non-pregnant female whose menstrual period is delayed, administration of neostigmine can provoke menstrual bleeding. Modern tests which rely on detecting hCG in urine have rendered this application obsolete.

Though one of only two treatments available for myasthenia gravis this drug is no longer available to anyone using the Medicare Part D program.