Previous studies have investigated the effects of acetylcholine (ACh) on neuronal tuning, coding, and attention in primary visual cortex, but its contribution to coding in extrastriate cortex is unexplored. Here we investigate the effects of ACh on tuning properties of macaque middle temporal area MT neurons and contrast them with effects of gabazine, a GABA(A) receptor blocker. ACh increased neuronal activity, it had no effect on tuning width, but it significantly increased the direction discriminability of a neuron. Gabazine equally increased neuronal activity, but it widened tuning curves and decreased the direction discriminability of a neuron. Although gabazine significantly reduced response reliability, ACh application had little effect on response reliability. Finally, gabazine increased noise correlation of simultaneously recorded neurons, whereas ACh reduced it. Thus, both drugs increased firing rates, but only ACh application improved neuronal tuning and coding in line with effects seen in studies in which attention was selectively manipulated.