Recent clinical and preclinical studies suggest that highly selective positive allosteric modulators (PAMs) for specific muscarinic acetylcholine receptor (mAChR) subtypes have exciting potential as novel treatments for positive symptoms, negative symptoms, and cognitive disturbances in patients suffering from schizophrenia. However, the precise mechanisms by which mAChRs regulate brain circuits that are relevant for the major symptom clusters associated with schizophrenia are unknown. It will be critical to develop a full understanding of the precise cellular and circuit roles of each mAChR subtype that could be relevant for schizophrenia and related brain disorders. Early stages of schizophrenia are associated with hyperactivity of the prefrontal cortex (PFC) and this is important for some of the cognitive and negative symptoms associated with the disease. Interestingly, we have found activation of the M1 subtype of mAChR induces long-term depression (M1-LTD) of transmission at excitatory synapses in the PFC, and also induces a robust increase in inhibitory transmission in this region. These combined actions could contribute to the established ability of highly selective M1 PAMs to reverse cognitive deficits in rodent models that are relevant for schizophrenia. Based on previous and new preliminary studies, we postulate that M1-LTD and M1-induced increases in synaptic inhibition in the PFC are mechanistically distinct and depend on activation of M1 in different neuronal populations. Specifically, we postulate that M1-LTD is mediated by activation phospholipase D (PLD) in PFC pyramidal cells, and that M1 increases inhibitory transmission through direct excitatory effects on specific populations of inhibitory interneurons through a PLD-independent mechanism. We propose a series of studies in which we will selectively delete M1 from specific neuronal populations and use M1 PAMs that differentially regulate coupling of M1 to PLD and phospholipase C (PLC), along with optogenetic silencing of specific neuronal populations, to rigorously evaluate the roles of M1 expressed in each of these major neuronal populations. Specifically, we will test the hypothesis that M1 PAMs induce M1-LTD by actions on M1 expressed in PFC pyramidal cells and do not require activation of M1 in inhibitory neurons (Aim 1). We will then perform a series of studies to test the hypothesis that M1 activation increases inhibitory transmission in the PFC by actions on defined populations of inhibitory interneurons (Aim 2). Finally, we will take advantage of our range of genetic, optogenetic, and pharmacological tools to test the hypothesis that M1 PAMs reverse deficits in specific behavioral measures of cognitive function by actions on different neuronal populations in the PFC (Aim 3). These studies will provide important new insights into the cellular and circuit mechanisms by which M1 PAMs enhance and restore deficits in specific domains of cognitive function that could be critic...