We have investigated the role of the projection from the magnocellular basal forebrain to the olfactory bulb in regulating synaptic transmission in the commissural connection between the two olfactory bulbs. Commissural fibers arise in the contralateral anterior olfactory nucleus, travel in the anterior wing of the anterior commissure (AC), and terminate in the granule cell layer of the olfactory bulb. Electrical stimulation of the commissure causes synaptic activation of granule cells in the granule cell layer of the bulb; the resulting field potential is a reliable indicator of this synaptic current. Microinjections of cholinergic agonists, but not of identical, or larger, quantities of vehicle, reduced the amplitude of this AC field potential. Systemic injection of scopolamine reversed this depression and returned the AC response amplitude to control levels. Irreversible AChE inhibition also reduced the amplitude of the AC response, and muscarinic blockade reversed this effect. Cholinergic terminals in the olfactory bulb arise entirely from the axons of magnocellular basal forebrain neurons in the nucleus of the diagonal band (NDB). Electrical stimulation of NDB, which should release ACh, as well as other transmitters, depressed the AC response. Brief trains of NDB shocks caused a moderate decrease in the AC response that lasted 1–2 sec. Longer shock trains, which caused marked potentiation of the NDB field potential, caused a profound, prolonged (> 20 sec) inhibition of the AC response. Antidromic tests demonstrated that NDB stimulation significantly decreased the excitability of AC terminals. This and other characteristics of the inhibition strongly suggest that the decrease in amplitude of the field potential response to AC stimulation caused by cholinergic agonists and stimulation of NDB is due to presynaptic inhibition leading to reduced release of transmitter from AC terminals. These results suggest that one function of the basal forebrain projection to the olfactory bulb is inhibition of the commissural connection between the two olfactory bulbs. As NDB has been implicated in theta pacemaker input to the olfactory bulb, phasic NDB inhibition of centrifugal afferents to the bulb could function to coordinate signal processing temporally in the olfactory system. Temporal coordination may be particularly important to olfactory circuit function, as this system lacks the point-to-point topographical organization characteristic of other sensory systems.