Acetylcholine (ACh) is a neurotransmitter critical for normal cognition. Here we demonstrate heterogeneity of cholinergic signaling in neocortical neurons in the rat prefrontal, somatosensory, and visual cortex. Focal ACh application (100 muM) inhibited layer 5 pyramidal neurons in all cortical areas via activation of an apamin-sensitive SK-type calcium-activated potassium conductance. Cholinergic inhibition was most robust in prefrontal layer 5 neurons, where it relies on the same signal transduction mechanism (M1-like receptors, IP(3)-dependent calcium release, and SK-channels) as exists in somatosensory pyramidal neurons. Pyramidal neurons in layer 2/3 were less responsive to ACh, but substantial apamin-sensitive inhibitory responses occurred in deep layer 3 neurons of the visual cortex. ACh was only inhibitory when presented near the somata of layer 5 pyramidal neurons, where repetitive ACh applications generated discrete inhibitory events at frequencies of up to approximately 0.5 Hz. Fast-spiking (FS) nonpyramidal neurons in all cortical areas were unresponsive to ACh. When applied to non-FS interneurons in layers 2/3 and 5, ACh generated mecamylamine-sensitive nicotinic responses (38% of cells), apamin-insensitive hyperpolarizing responses, with or without initial nicotinic depolarization (7% of neurons), or no response at all (55% of cells). Responses in interneurons were similar across cortical layers and regions but were correlated with cellular physiology and the expression of biochemical markers associated with different classes of nonpyramidal neurons. Finally, ACh generated nicotinic responses in all layer 1 neurons tested. These data demonstrate that phasic cholinergic input can directly inhibit projection neurons throughout the cortex while sculpting intracortical processing, especially in superficial layers.