We understand this review as an attempt to summarize recent advances in the understanding of cholinergic function in cognition. Such a role has been highlighted in the 1970s by the discovery that dementia patients have greatly reduced cholinergic activity in cortex and hippocampus. A brief anatomical description of the major cholinergic pathways focuses on the basal forebrain and its projections to cortex and hippocampus. From this distinction, compelling evidence suggests that the basal forebrain --> cortex projection regulates the excitability of principal cortical neurons and is thereby critically involved in attention, stimulus detection and memory function, although the biological conditions for these functions are still debated. Similar uncertainties remain for the septo-hippocampal cholinergic system. Although initial lesions of the septum caused memory deficits reminiscent of hippocampal ablations, recent and more refined neurotoxic lesion studies which spared non-cholinergic cells of the basal forebrain failed to confirm these memory impairments in experimental animals despite a near total loss of cholinergic labeling. Yet, a decline in cholinergic markers in aging and dementia still stands as the most central piece of evidence for a link between the cholinergic system and cognition and appear to provide valuable targets for therapeutic approaches.