Cholinergic basal forebrain (CBF) neurons project throughout the neocortex, hippocampus, and amygdala to modulate perceptual salience and regulate synaptic plasticity underlying learning and memory. CBF research has focused on rostral regions, including the medial septum, nuclei of the diagonal band, and nucleus basalis (NB). The caudal extreme of the basal forebrain has been largely overlooked, yet our research suggests that this caudal tail region – much like the tail of the striatum – can be conceptualized as a distinct functional subdomain with categorically different response properties than more rostral regions. The projections of CBF tail neurons (CBFt) are concentrated in two regions: the auditory cortex (ACtx) and the thalamic reticular nucleus (TRN). Our published and preliminary recordings from CBFt neurons in passively listening mice reveal surprisingly strong, short-latency, low-threshold responses to a broad class of auditory stimuli that have no explicit behavioral relevance. Comparable responses are not observed for stimuli in other modalities or from more rostral CBF neurons. CBFt sound responses are not stable, but instead are rapidly and selectively enhanced for threat-predicting sounds during Pavlovian and instrumental learning paradigms. Thus, our studies of the tail region suggest a different model for cholinergic modulation of cortical sound processing in which the ACtx is continuously bombarded by sound-triggered acetylcholine (ACh) surges that reorganize during learning to highlight relevant sounds and guide cortical receptive field plasticity. Here, we describe three specific aims for the coming project period that will illuminate how the CBFt regulates thalamocortical sound processing, perceptual awareness of sound, and associative plasticity during auditory learning. Studies in Aim 1 will test an inverted-U hypothesis for cholinergic modulation of sound processing, which holds that sensory tuning in the primary ACtx (A1) and TRN become imprecise and unreliable during transient peaks and troughs of local endogenous ACh release. Further, we predict that these effects can be accounted for – in part – by the particularly strong influence of CBFt-mediated ACh release on A1 layer 6 corticothalamic neurons, as tested by studies in both intact and acute thalamocortical brain slice preparations. Aim 2 will extend these ideas to the behavioral domain by showing that occasional lapses in thalamocortical encoding and perceptual awareness of target sounds (i.e., miss trials) can be attributed to stochastic peaks and troughs in CBFt-mediated ACh levels immediately preceding target sound onset. Aim 3 will test the hypothesis that enhanced CBFt responses to sounds associated with aversive – but not appetitive – reinforcement is sufficient to shift A1 sound representations from a mode of net stability to heightened plasticity that supports associative auditory learning. These hypotheses will be tested through the combined application o...