Degeneration of the cholinergic system is considered to be the underlying pathology that results in the cognitive deficit in Alzheimer's disease. This pathology is thought to be linked to a loss of signaling through the cholinergic M(1)-muscarinic receptor subtype. However, recent studies have cast doubt on whether this is the primary receptor mediating cholinergic-hippocampal learning and memory. The current study offers an alternative mechanism involving the M(3)-muscarinic receptor that is expressed in numerous brain regions including the hippocampus. We demonstrate here that M(3)-muscarinic receptor knockout mice show a deficit in fear conditioning learning and memory. The mechanism used by the M(3)-muscarinic receptor in this process involves receptor phosphorylation because a knockin mouse strain expressing a phosphorylation-deficient receptor mutant also shows a deficit in fear conditioning. Consistent with a role for receptor phosphorylation, we demonstrate that the M(3)-muscarinic receptor is phosphorylated in the hippocampus following agonist treatment and following fear conditioning training. Importantly, the phosphorylation-deficient M(3)-muscarinic receptor was coupled normally to G(q/11)-signaling but was uncoupled from phosphorylation-dependent processes such as receptor internalization and arrestin recruitment. It can, therefore, be concluded that M(3)-muscarinic receptor-dependent learning and memory depends, at least in part, on receptor phosphorylation/arrestin signaling. This study opens the potential for biased M(3)-muscarinic receptor ligands that direct phosphorylation/arrestin-dependent (non-G protein) signaling as being beneficial in cognitive disorders.