The therapeutic agents currently used to treat schizophrenia effectively improve psychotic symptoms; however, they are limited by adverse effects and poor efficacy when negative symptoms of the illness and cognitive dysfunction are considered. While optimal pharmacotherapy would directly target the neuropathology of schizophrenia neither the underlying neurobiological substrates of the behavioral symptoms nor the cognitive deficits have been clearly established. Abnormalities in the neurotransmitters dopamine, serotonin, glutamate, and GABA are commonly implicated in schizophrenia; however, it is not uncommon for alterations in the brain cholinergic system (e.g., choline acetyltransferase, nicotinic and muscarinic acetylcholine receptors) to also be reported. Further, there is now considerable evidence in the animal literature to suggest that both first and second generation antipsychotics (when administered chronically) can alter the levels of several cholinergic markers in the brain as well as impair memory-related task performance. Given the well-established importance of central cholinergic neurons to information processing and cognition, it is important that cholinergic function in schizophrenia be further elucidated and that the mechanisms of the chronic effects of antipsychotic drugs on this important neurotransmitter system be identified. A better understanding of these mechanisms would be expected to facilitate optimal treatment strategies for schizophrenia as well as the identification of novel therapeutic targets. In this review, the following topics are discussed: 1) the central cholinergic system in schizophrenia 2) effects of antipsychotic drugs on central cholinergic neurons 3) important neurotrophins in schizophrenia, especially those that support central cholinergic neurons; 4) novel strategies to optimize the therapeutics of schizophrenia via the use of cholinergic compounds as primary (i.e., antipsychotic) treatments as well as adjunctive, pro-cognitive agents.