In the adult nervous system, neurotransmitters mediate cellular communication within neuronal circuits. In developing tissues and primitive organisms, neurotransmitters subserve growth regulatory and morphogenetic functions. Accumulated evidence suggests that acetylcholine, (ACh), released from growing axons, regulates growth, differentiation, and plasticity of developing central nervous system neurons. In addition to intrinsic cholinergic neurons, the cerebral cortex and hippocampus receive extensive innervation from cholinergic neurons in the basal forebrain, beginning prenatally and continuing throughout the period of active growth and synaptogenesis. Acute exposure to ethanol in early gestation (which prevents formation of basal forebrain cholinergic neurons) or neonatal lesioning of basal forebrain cholinergic neurons, significantly compromises cortical development and produces persistent impairment of cognitive functions. Neonatal visual deprivation alters developmental expression of muscarinic acetylcholine receptors (mAChR) in visual cortex, whereas local infusion of mAChR antagonists impairs plasticity of visual cortical neurons. These findings raise the possibility that exposure to environmental neurotoxins that affect cholinergic systems may seriously compromise brain development and have long-lasting morphologic, neurochemical, and functional consequences.