The organization and possible functions of basal forebrain and pontine cholinergic systems are reviewed. Whereas the basal forebrain cholinergic neuronal projections likely subserve a common electrophysiological function, e.g. to boost signal-to-noise ratios in cortical target areas, this function has different effects on psychological processes dependent upon the neural network operations within these various cortical domains. Evidence is presented that (a) the nucleus basalis-neocortical cholinergic system contributes greatly to visual attentional function, but not to mnemonic processes per se; (b) the septohippocampal projection is involved in the modulation of short-term spatial (working) memory processes, perhaps by prolonging the neural representation of external stimuli within the hippocampus; and (c) the diagonal band-cingulate cortex cholinergic projection impacts on the ability to utilize response rules through conditional discrimination. We also suggest that nucleus basalis-amygdala cholinergic projections have a role in the retention of affective conditioning while brainstem cholinergic projections to the thalamus and midbrain dopamine neurons affect basic arousal processes (e.g. sleep-wake cycle) and behavioral activation, respectively. The possibilities and limitations of therapeutic interventions with procholinergic drugs in patients with Alzheimer's disease and other neurodegenerative disorders in which basal forebrain cholinergic neurons degenerate are also discussed.