Among the five different muscarinic receptors that have been cloned and characterized, M2 and M4 receptors are localized both post- and presynaptically and are believed to have a pronounced autoreceptor role. The functional importance of these receptors in the regulation of acetylcholine release in the hippocampus and in cognitive processes was investigated by using M2 and M4 receptor single knockout (KO) as well as M2/M4 receptor double KO mice. We found profound alterations in acetylcholine homeostasis in the hippocampus of both M2- and M4-KO mice as well as of the combined M2/M4-KOs, as assessed by in vivo microdialysis. Basal acetylcholine efflux in the hippocampus was significantly increased in M4-KO and was elevated further in M2/M4-KOs. The increase in hippocampal acetylcholine induced by local administration of scopolamine was markedly reduced in M2-KO and completely abolished in M2/M4-KOs. In M2-KO and much more in M2/M4-KOs, the increase in hippocampal acetylcholine triggered by exposure to a novel environment was more pronounced both in amplitude and duration, with a similar trend observed for M4-KOs. Dysregulation of cholinergic function in the hippocampus, as it could result from perturbed autoreceptor function, may be associated with cognitive deficits. Importantly, M2- and M2/M4-KO, but not M4-KO, animals showed an impaired performance in the passive avoidance test. Together these results suggest a crucial role for muscarinic M2 and M4 receptors in the tonic and phasic regulation of acetylcholine efflux in the hippocampus as well as in cognitive processes.