Muscarinic receptors modulate hippocampal activity in two main ways: inhibition of synaptic activity and enhancement of excitability of hippocampal cells. Due to the lack of pharmacological tools, it has not been possible to identify the individual receptor subtypes that mediate the specific physiological actions that underlie these forms of modulation. Light and electron microscopic immunocytochemistry using subtype-specific antibodies was combined with lesioning techniques to examine the pre- and postsynaptic location of m1-m4 mAChR at identified hippocampus synapses. The results revealed striking differences among the subtypes, and suggested different ways that the receptors modulate excitatory and inhibitory transmission in distinct circuits. Complementary physiological studies using m1-toxin investigated the modulatory effects of this subtype on excitatory transmission in more detail. The implications of these data for understanding the functional roles of these subtypes are discussed.