The central cholinergic system has been implicated in the pathophysiology of mood disorders. An imbalance in central cholinergic neurotransmitter activity has been proposed to contribute to the manic and depressive episodes typical of these disorders. Neuropharmacological studies into the effects of cholinergic agonists and antagonists on mood state have provided considerable support for this hypothesis. Furthermore, recent clinical studies have shown that the pan-CHRM antagonist, scopolamine, produces rapid-acting antidepressant effects in individuals with either major depressive disorder (MDD) or bipolar disorder (BPD), such as bipolar depression, contrasting the delayed therapeutic response of conventional mood stabilisers and antidepressants. This review presents recent data from neuroimaging, post-mortem and genetic studies supporting the involvement of muscarinic cholinergic receptors (CHRMs), particularly CHRM2, in the pathophysiology of MDD and BPD. Thus, novel drugs that selectively target CHRMs with negligible effects in the peripheral nervous system might produce more rapid and robust clinical improvement in patients with BPD and MDD.