Quote from Wikipedia:
Piracetam's mechanism of action, as with racetams in general, is not fully understood. The drug influences neuronal and vascular functions and influences cognitive function without acting as a sedative or stimulant. Piracetam is a positive allosteric modulator of the AMPA receptor. It is hypothesized to act on ion channels or ion carriers, thus leading to increased neuron excitability. GABA brain metabolism and GABA receptors are not affected by piracetam.
It has been found to increase blood flow and oxygen consumption in parts of the brain, but this may be a side effect of increased brain activity rather than a primary effect or mechanism of action for the drug.
Piracetam improves the function of the neurotransmitter acetylcholine via muscarinic cholinergic (ACh) receptors, which are implicated in memory processes. Furthermore, piracetam may have an effect on NMDA glutamate receptors, which are involved with learning and memory processes. Piracetam is thought to increase cell membrane permeability. Piracetam may exert its global effect on brain neurotransmission via modulation of ion channels (i.e., Na+, K+). It has been found to increase oxygen consumption in the brain, apparently in connection to ATP metabolism, and increases the activity ofadenylate kinase in rat brains. Piracetam, while in the brain, appears to increase the synthesis of cytochrome b5, which is a part of the electron transport mechanism in mitochondria. But in the brain, it also increases the permeability of the mitochondria of some intermediaries of the Krebs cycle.