Cholinergic afferents innervate cerebral cortex during the most dynamic period of neuronal differentiation and synapse formation, suggesting they play a possible regulatory role in these events. A number of in vivo studies have shown over the last decade that alterations in cholinergic innervation during early postnatal development can change various features of cortical ontogeny. In particular, neonatal lesions to basal forebrain cholinergic afferents result in delayed cortical neuronal development and permanently altered cortical cytoarchitecture and cognitive behaviors. Likewise, cholinergic manipulations affect morphological plasticity in cat visual cortex as well as in the somatosensory cortex of rodents. Furthermore, augmentation of cholinergic function by means of perinatal choline treatment enhances cognitive performance in a sex specific manner. Additional indications for a sexual dimorphism in cortical cholinergic innervation and resulting function are gathered from a variety of paradigms. Recent information about effects of NGF, BDNF and NTB-4/5 on cortical morphogenesis and plasticity reveals complex interactions between the cholinergic basal forebrain afferents and this neurotrophin family. Detailed studies on the expression of cholinergic receptor proteins in cortical development and their associated signal transduction pathways strongly point towards a morphogenetic function of muscarinic receptors, in particular. Transient receptor localization in thalamocortical terminal fields and on a variety of other non-cholinergic fiber bundles suggest a cholinergic role in target finding and/or synapse formation for cortical afferents and efferents. We propose a hypothesis regarding the mechanisms for cholinergic regulation of neuronal differentiation and synapse formation on the level of the individual growth cone and discuss possibilities for cholinergic interactions with differential gene expression. We conclude that understanding the precise role of the cholinergic system in cortical morphogenesis and its relationship to neurotrophin function will be of clinical relevance for a number of developmental brain disorders, including Down Syndrome and Rett Syndrome.