Neuromodulators including acetylcholine, norepinephrine, serotonin, dopamine and a range of peptides alter the processing characteristics of cortical networks through effects on excitatory and inhibitory synaptic transmission, on the adaptation of cortical pyramidal cells, on membrane potential, on the rate of synaptic modification, and on other cortical parameters. Computational models of self-organization and associative memory function in cortical structures such as the hippocampus, piriform cortex and neocortex provide a theoretical framework in which the role of these neuromodulatory effects can be analyzed. Neuromodulators such as acetylcholine and norepinephrine appear to enhance the influence of synapses from afferent fibers arising outside the cortex relative to the synapses of intrinsic and association fibers arising from other cortical pyramidal cells. This provides a continuum between a predominant influence of external stimulation to a predominant influence of internal recall (extrinsic vs. intrinsic). Modulatory influence along this continuum may underlie effects described in terms of learning and memory, signal to noise ratio, and attention.