The striatum is the main input station of the basal ganglia and is extensively involved in the modulation of motivated behavior. The information conveyed to this subcortical structure through glutamatergic projections from the cerebral cortex and thalamus is processed by the activity of several striatal neuromodulatory systems including the cholinergic system. Acetylcholine potently modulates glutamate signaling in the striatum via activation of muscarinic receptors (mAChRs). It is, however, unclear which mAChR subtype is responsible for this modulatory effect. Here, by using electrophysiological, optogenetic, and immunoelectron microscopic approaches in conjunction with a novel, highly selective M4 positive allosteric modulator VU0152100 (ML108) and M4 knockout mice, we show that M4 is a major mAChR subtype mediating the cholinergic inhibition of corticostriatal glutamatergic input on both striatonigral and striatopallidal medium spiny neurons (MSNs). This effect is due to activation of presynaptic M4 receptors, which, in turn, leads to a decrease in glutamate release from corticostriatal terminals. The findings of the present study raise the interesting possibility that M4 mAChR could be a novel therapeutic target for the treatment of neurological and neuropsychiatric disorders involving hyper-glutamatergic transmission at corticostriatal synapses.