Neuroligins are cell adhesion molecules that interact with neurexins on adjacent cells to promote glutamatergic and GABAergic synapse formation in culture. We show here that neuroligin enhances nicotinic synapses on neurons in culture, increasing synaptic input. When neuroligin is overexpressed in neurons, the extracellular domain induces presynaptic specializations in adjacent cholinergic neurons as visualized by SV2 puncta. The intracellular domain is required to translate the SV2 puncta into synaptic input as reflected by increases in the frequency of spontaneous mini-synaptic currents. The PDZ-binding motif of neuroligin is not needed for these effects. Together, the extracellular and proximal intracellular domains of neuroligin are sufficient to induce presynaptic specializations, align them over postsynaptic receptor clusters, and increase synaptic function. Manipulation of endogenous neuroligin with beta-neurexin-expressing cells confirms its presence; repressing function with dominant negative constructs and inhibitory shRNA shows that endogenous neuroligin helps confer functionality on existing nicotinic synaptic contacts. Endogenous neuroligin does not appear to be required, however, for initial formation of the contacts, suggesting that other components under these conditions can also initiate synapse formation. The results indicate that postsynaptic neuroligin is important for functional nicotinic synapses on neurons and that the effects achieved will likely depend on neuroligin levels.