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Cholinergic dysfunction has been associated with cognitive abnormalities in a variety of neurodegenerative and neuropsychiatric diseases. Here we tested how information processing is regulated by cholinergic tone in genetically modified mice targeting the vesicular acetylcholine transporter (VAChT), a protein required for acetylcholine release. We measured long-term potentiation of Schaffer collateral-CA1 synapses in vivo and assessed information processing by using a mouse touchscreen version of paired associates learning task (PAL). Acquisition of information in the mouse PAL task correlated to levels of hippocampal VAChT, suggesting a critical role for cholinergic tone. Accordingly, synaptic plasticity in the hippocampus in vivo was disturbed, but not completely abolished, by decreased hippocampal cholinergic signaling. Disrupted forebrain cholinergic signaling also affected working memory, a result reproduced by selectively decreasing VAChT in the hippocampus. In contrast, spatial memory was relatively preserved, whereas reversal spatial memory was sensitive to decreased hippocampal cholinergic signaling. This work provides a refined roadmap of how synaptically secreted acetylcholine influences distinct behaviors and suggests that distinct forms of cognitive processing may be regulated in different ways by cholinergic activity.