The mammalian olfactory epithelium is made up of ciliated olfactory sensory neurons (OSNs), supporting cells, basal cells, and microvillous cells. Previously, we reported that a population of nonneuronal microvillous cells expresses transient receptor potential channel M5 (TRPM5). Using transgenic mice and immunocytochemical labeling, we identify that these cells are cholinergic, expressing the signature markers of choline acetyltransferase (ChAT) and the vesicular acetylcholine transporter. This result suggests that acetylcholine (ACh) can be synthesized and released locally to modulate activities of neighboring supporting cells and OSNs. In Ca(2+) imaging experiments, ACh induced increases in intracellular Ca(2+) levels in 78% of isolated supporting cells tested in a concentration-dependent manner. Atropine, a muscarinic ACh receptor (mAChR) antagonist suppressed the ACh responses. In contrast, ACh did not induce or potentiate Ca(2+) increases in OSNs. Instead ACh suppressed the Ca(2+) increases induced by the adenylyl cyclase activator forskolin in some OSNs. Supporting these results, we found differential expression of mAChR subtypes in supporting cells and OSNs using subtype-specific antibodies against M(1) through M(5) mAChRs. Furthermore, we found that various chemicals, bacterial lysate, and cold saline induced Ca(2+) increases in TRPM5/ChAT-expressing microvillous cells. Taken together, our data suggest that TRPM5/ChAT-expressing microvillous cells react to certain chemical or thermal stimuli and release ACh to modulate activities of neighboring supporting cells and OSNs via mAChRs. Our studies reveal an intrinsic and potentially potent mechanism linking external stimulation to cholinergic modulation of activities in the olfactory epithelium.