Cholinergic neurons of the pedunculopontine nucleus (Ch5) are believed to monosynaptically excite ventral tegmental dopamine neurons. Muscarinic blockers injected near dopamine cells block the rewarding effect of hypothalamic or dorsal tegmental rewarding brain stimulation (RBS) in rats. Because Ch5 cells are inhibited by muscarinic agonists, we injected muscarinic drugs unilaterally near Ch5 neurons to inhibit or disinhibit them. Carbachol raised thresholds for hypothalamic self-stimulation bilaterally by over 400%, whereas scopolamine reduced thresholds by 20%–80%. Pretreatment with either carbachol or scopolamine blocked the effect of the other drug, which suggests that both acted through the same receptors near Ch5 cells. Therefore, activation of Ch5 neurons is critical for hypothalamic RBS. A mechanism for the involvement of Ch5 neurons in drug rewards and antimuscarinic psychosis is also proposed.