Hippocampal networks are particularly susceptible to dysfunction in many neurodegenerative diseases and neuropsychiatric disorders including Alzheimer's disease, Lewy body dementia, and schizophrenia. CA1, a major output region of the hippocampus, receives glutamatergic input from both hippocampal CA3 and entorhinal cortex, via the Schaffer collateral (SC) and temporoammonic (TA) pathways, respectively. SC and TA inputs to CA1 are thought to be differentially involved in the retrieval of previously stored memories versus the encoding of novel information, and switching between these two crucial hippocampal functions is thought to critically depend on acetylcholine (ACh) acting at muscarinic receptors. In this study, we aimed to determine the roles of specific subtypes of muscarinic receptors in mediating the neuromodulatory effects of ACh on glutamatergic synaptic transmission in the SC and TA pathways of CA1. Using selective pharmacological activation of M1 or M4 receptors along with extracellular and intracellular electrophysiology recordings from adult rat hippocampal slices, we demonstrate that activation of M1 receptors increases spontaneous spike rates of neuronal ensembles in CA1 and increases the intrinsic excitability of pyramidal neurons and interneurons. Selective activation of M4 receptors inhibits glutamate release in the SC pathway, while leaving synaptic transmission in the TA pathway comparatively intact. These results suggest specific mechanisms by which M1 and M4 activation may normalize CA1 circuit activity following disruptions of signaling that accompany neurodegenerative dementias or neuropsychiatric disorders. These findings are of particular interest in light of clinical findings that xanomeline, an M1/M4 preferring agonist, was able to improve cognitive and behavioral symptoms in patients with Alzheimer's disease or schizophrenia.