Glucocorticoids have been shown to influence trophic processes in the nervous system. In particular, they seem to be important for the development of cholinergic neurons in various brain regions. Here, we applied a genetic approach to investigate the role of the glucocorticoid receptor (GR) on the maturation and maintenance of cholinergic medial septal neurons between P15 and one year of age by using a mouse model carrying a CNS-specific conditional inactivation of the GR gene (GRNesCre). The number of choline acetyltransferase and p75NTR immuno-positive neurons in the medial septum (MS) was analyzed by stereology in controls versus mutants. In addition, cholinergic fiber density, acetylcholine release and cholinergic key enzyme activity of these neurons were determined in the hippocampus. We found that in GRNesCre animals the number of medial septal cholinergic neurons was significantly reduced during development. In addition, cholinergic cell number further decreased with aging in these mutants. The functional GR gene is therefore required for the proper maturation and maintenance of medial septal cholinergic neurons. However, the loss of cholinergic neurons in the medial septum is not accompanied by a loss of functional cholinergic parameters of these neurons in their target region, the hippocampus. This pinpoints to plasticity of the septo-hippocampal system, that seems to compensate for the septal cell loss by sprouting of the remaining neurons.