In several neurodegenerative disorders, including Alzheimer's disease, a loss of the cholinergic projections of the basal forebrain to the cerebral cortex and hippocampus occurs. Studies of the anatomic and physiologic characteristics of these ascending cholinergic systems suggest that they are important in processing information and in memory function. Muscarinic receptors are situated at various critical control points in these pathways. Activation of postsynaptic muscarinic receptors often increases the excitability of neurons; thus, the signal-to-noise ratio for sensory processing is enhanced. In addition, muscarinic receptors negatively control cholinergic tone at presynaptic sites. Molecular biologic methods have disclosed the existence of rive muscarinic receptors, which are coupled to different second messenger systems. The evidence reviewed suggests that at least four of the five muscarinic receptor genes are expressed as functional receptor proteins in the neocortex and hippocampal formation. On the basis of the current information about their pharmacologic properties and coupling mechanisms in nervous tissue, drugs that selectively affect subtypes of muscarinic receptors could enhance cortical cholinergic function and thereby ameliorate certain cognitive impairments in Alzheimer's disease.