Acetylcholine signaling through nicotinic receptors (nAChRs) in the prefrontal cortex (PFC) is crucial for attention. Nicotinic AChRs are expressed on glutamatergic inputs to layer V (LV) cells and on LV interneurons and LVI pyramidal neurons. Whether PFC layers are activated by nAChRs to a similar extent or whether there is layer-specific activation is not known. Here, we investigate nAChR modulation of all PFC layers and find marked layer specificity for pyramidal neurons: LII/III pyramidal neurons and glutamatergic inputs to these cells do not contain nAChRs, LV and LVI pyramidal neurons are modulated by α7 and β2* nAChRs, respectively. Interneurons across layers contain mixed combinations of nAChRs. We then tested the hypothesis that nAChRs activate the PFC in a layer-specific manner using 2-photon population imaging. In all layers, nAChR-induced neuronal firing was dominated by β2* nAChRs. In LII/III, only interneurons were activated. In LV and LVI, both interneurons and pyramidal neurons were activated, the latter most strongly in LVI. Together, these results suggest that in the PFC nAChR activation results in inhibition of LII/III pyramidal neurons. In LV and LVI, nAChR-induced activation of inhibitory and excitatory neurons results in a net augmentation of output neuron activity.