Nerve growth factor (NGF) has been implicated in maintaining and regulating normal functioning of the septohippocampal pathway. However, many aspects of its physiological actions and the underlying mechanisms await elucidation. In this study, we investigated the effect of acute NGF exposure on neurons in the mouse medial septum/diagonal band of Broca (MS/DB), focusing on the cholinergic neurons and the subpopulation of noncholinergic neurons that were identified to be putatively GABAergic. We report that MS/DB neurons in a thin slice preparation, when exposed to NGF via bath perfusion, rapidly and indiscriminately increased the rate of spontaneous firing in all MS/DB neurons. However, focal application of NGF to individual MS/DB neurons increased spontaneous firing in cholinergic, but not in the noncholinergic, subpopulation. The NGF-induced effect on cholinergic neurons was direct, requiring activation and signaling via TrkA receptors, which were immunohistochemically localized to the cholinergic neurons in the MS/DB. TrkA receptors were absent in putative GABAergic MS/DB neurons, and blockade of TrkA signaling in these and other noncholinergic neurons had no effect on their firing activity after exposure to NGF. Conversely, methyl scopolamine, blocked the increased firing activity of noncholinergic neurons during bath perfusion of NGF. We propose a cell type-specific mode of action for NGF in the MS/DB. The neurotrophin directly enhances cholinergic neuronal activity in the MS/DB through TrkA-mediated signaling, increasing acetylcholine release and, thus, muscarinic tone. This increase in muscarinic tone, in turn, results in heightened firing activity in noncholinergic MS/DB neurons.