Acetylcholine (ACh) has been shown to modulate neuronal differentiation during early development. Both muscarinic and nicotinic acetylcholine receptors (AChRs) regulate a wide variety of physiological responses, including apoptosis, cellular proliferation and neuronal differentiation. However, the intracellular mechanisms underlying these effects of AChR signaling are not fully understood. It is known that activation of AChRs increase cellular proliferation and neurogenesis and that regulation of intracellular calcium through AChRs may underlie the many functions of ACh. Intriguingly, activation of diverse signaling molecules such as Ras-mitogen-activated protein kinase, phosphatidylinositol 3-kinase-Akt, protein kinase C and c-Src is modulated by AChRs. Here we discuss the roles of ACh in neuronal differentiation, cell proliferation and apoptosis. We also discuss the pathways involved in these processes, as well as the effects of novel endogenous AChRs agonists and strategies to enhance neuronal-differentiation of stem and neural progenitor cells. Further understanding of the intracellular mechanisms underlying AChR signaling may provide insights for novel therapeutic strategies, as abnormal AChR activity is present in many diseases.