The rat nucleus accumbens contains acetylcholine-releasing interneurons, presumed to play a regulatory role in the electrical activity of medium spiny output neurons. In order to examine this issue in detail, we made electrophysiological recordings in rat nucleus accumbens slices. These experiments showed that gamma-aminobutyric acid-mediated inhibition of the output neurons might be facilitated by activation of nicotinic acetylcholine receptors, in addition to being suppressed via activation of muscarinic acetylcholine receptors. In contrast, glutamatergic excitation of output neurons appeared to be inhibited by activation of muscarinic acetylcholine receptors and to be insensitive to activation of nicotinic acetylcholine receptors. The spontaneous firing frequency of cholinergic neurons appeared to be under control of both a muscarinic and a nicotinic pathway in a bi-directional manner. Finally, we made paired recordings in which the functional connection between cholinergic neurons and output neurons was monitored. Driving the cholinergic neurons at physiological firing frequencies stimulated gamma-aminobutyric acid-mediated inhibition of the output neurons, via activation of nicotinic acetylcholine receptors. The onset of this effect was slow and lacked a fixed delay. These data indicate that activation of nicotinic acetylcholine receptors in rat nucleus accumbens may mediate the facilitation of gamma-aminobutyric acid-mediated inhibition of medium spiny output neurons. Possible mechanisms of neurotransmission, mediating this cholinergic modulation are discussed.