Cholinergic neurons of the basal forebrain magnocellular complex (BF) constitute the primary source of ACh to the cerebral cortex and are thought to be instrumental in mediating cortical activation and plasticity. Recent light and electron microscopic studies have revealed a selective association of receptors for the neuropeptide neurotensin (NT) with BF cholinergic neurons, suggesting that this peptide may be playing a key role in the control of BF cholinergic function. In the present study, we have investigated by means of intracellular recording in guinea pig brain slices the neuromodulatory actions of NT on the intrinsic excitability of BF cholinergic neurons that were identified electrophysiologically by their low-threshold discharge, slow afterhyperpolarization, and transient outward rectification (TOR). In all cholinergic neurons tested (n = 39), bath application of NT (20–200 nM for 1–4 min) produced, via a direct mechanism, a membrane potential depolarization associated with a decrease in apparent input conductance. Most significantly, NT led to the emergence of a very prominent slow rhythmic bursting pattern that could shape into complex spindle-like sequences that were intrinsically generated by the cholinergic cells. These NT actions were also accompanied by a reduction of both the slow afterhyperpolarization and TOR. Bursting oscillations relied on the activation of Ca2+ conductances as opposed to Na+ conductances, since they were absent during Ca(2+)-conductance block with Mn2+, but still occurred in the presence of the Na(+)- channel blocker TTX. NT actions were specific, since they could be reproduced by application of the active (NT 8–13) but not of the inactive (NT 1–8) fragment of the peptide. Identification of the BF cholinergic neurons as direct NT targets was further provided by confocal laser scanning microscopic demonstration of internalization of a fluoresceinylated derivative of NT (fluo-NT) within biocytin-filled, electrophysiologically identified cholinergic neurons. The results demonstrate the electrophysiological functionality of NT receptors on BF cholinergic neurons and the existence of a receptor-mediated internalization of NT in these cells. They also suggest that the peptide is an important player in the control of BF function and, in particular, in the generation of forebrain network oscillations.