Central cholinergic (muscarinic) systems play an important role in learning and memory. In mammalian central neurons, muscarinic stimulation depresses several voltage-activated K+ currents and modulates synaptic transmission. Using whole-cell voltage-clamp recordings in hippocampal CA1 neurons of rat brain slices, we report that activation of muscarinic receptors potentiates a voltage- activated, sustained K+ current (IK-type). This potentiation of IK is mediated by activation of protein kinase C and involves a G-protein- linked, intracellular Ca(2+)-dependent process. This underlying second messenger pathway may prove to be important in the mediation of other previously reported muscarinic neuronal actions.