The high affinity of antipsychotic drugs for the dopamine D2 receptor focused attention onto the role of these receptors in the genesis of psychoses and the pathology of schizophrenia. However, psychotic symptoms are only one aspect of the complex symptom profile associated with schizophrenia. Therefore, research continues into other neurochemical systems and their potential roles in key features associated with schizophrenia. Modulating the cholinergic system in attempts to treat schizophrenia predates specific neurochemical hypotheses of the disorder. Cholinergic modulation has progressed from the use of coma therapy, through the use of anti-cholinergic drugs to control side-effects of older (typical) antipsychotic medications, to the development of drugs designed to specifically activate selected muscarinic receptors. This review presents data implicating a decrease in muscarinic receptors, particularly the M1 receptor, in the pathology of schizophrenia and explores the potential physiological consequences of such a change, drawing on data available from muscarinic receptor knockout mice as well as clinical and pre-clinical pharmacology. The body of evidence presented suggests that deficits in muscarinic receptors are associated with some forms of schizophrenia and that targeting these receptors could prove to be of therapeutic benefit to patients with the disorder.