We have hypothesized that auditory cortex plasticity involves modification of thalamocortical transmission by basal forebrain (BF) cholinergic neurons, and that this action may involve muscarinic receptors. In a first test of this hypothesis, we report that BF stimulation can suppress or facilitate, depending on the intensity of stimulation, auditory cortical responses elicited by thalamic stimulation. BF-mediated facilitation is antagonized by atropine, implicating muscarinic receptors. These data suggest that BF cholinergic neurons functionally modify auditory cortex by regulating thalamocortical transmission.