The central cholinergic system and muscarinic cholinergic receptor (mR) activation have long been associated with cognitive function. And degeneration of the cholinergic basal forebrain (CBF) neurons is a pronounced hallmark of Alzheimers Disease (AD). However, CBF immunolesions as animal models of AD cholinergic degeneration have not replicated the robust memory deficits of nonselective excitotoxic lesions. The less studied cholinergic projections to the amygdala, which are affected in AD but unaffected by immunolesions, may be more important in memory storage than previously suspected. The sparing of these amygdalopetal projections may help explain the dissociation between excitotoxic and immunotoxic CBF lesions. The CBF projections to cortex have since been shown to be important for attentional processes, which may contribute indirectly to memory. Nonetheless, there are conditions under which their selective ablation produces clear memory deficits. For example, memory enhancement induced by posttraining basolateral amygdalar activation is ineffective when corticopetal cholinergic projections are lesioned. Moreover, posttraining cholinergic agonism enhances long-term memory. Such findings suggest that cholinergic innervation of the cortex may be particularly important during modulation of memory storage for stressful and / or arousing events. In concordance, mR agonism facilitates neuronal plasticity and can induce expression of memory-associated immediate early genes. The present article reviews the behavior, physiology and inducible genetic expression literatures which together suggest that the early CBF lesion data were not a red herring but rather that CBF projections not only to cortex but also to the amygdala may in fact have important neuromodulatory functions in memory consolidation processes.