Cholinergic drugs acting at M1/M4 muscarinic receptors hold promise for the treatment of symptoms associated with brain disorders characterized by cognitive impairment, mood disturbances, or psychosis, such as Alzheimer's disease or schizophrenia. However, the brain-wide functional substrates engaged by muscarinic agonists remain poorly understood. Here we used a combination of pharmacological fMRI (phMRI), resting-state fMRI (rsfMRI), and resting-state quantitative EEG (qEEG) to investigate the effects of a behaviorally active dose of the M1/M4-preferring muscarinic agonist xanomeline on brain functional activity in the rodent brain. We investigated both the effects of xanomeline per se and its modulatory effects on signals elicited by the NMDA-receptor antagonists phencyclidine (PCP) and ketamine. We found that xanomeline induces robust and widespread BOLD signal phMRI amplitude increases and decreased high-frequency qEEG spectral activity. rsfMRI mapping in the mouse revealed that xanomeline robustly decreased neocortical and striatal connectivity but induces focal increases in functional connectivity within the nucleus accumbens and basal forebrain. Notably, xanomeline pre-administration robustly attenuated both the cortico-limbic phMRI response and the fronto-hippocampal hyper-connectivity induced by PCP, enhanced PCP-modulated functional connectivity locally within the nucleus accumbens and basal forebrain, and reversed the gamma and high-frequency qEEG power increases induced by ketamine. Collectively, these results show that xanomeline robustly induces both cholinergic-like neocortical activation and desynchronization of functional networks in the mammalian brain. These effects could serve as a translatable biomarker for future clinical investigations of muscarinic agents, and bear mechanistic relevance for the putative therapeutic effect of these class of compounds in brain disorders.