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Abstract The neostriatum (dorsal striatum) is composed of the caudate and putamen. The ventral striatum is the ventral conjunction of the caudate and putamen that merges into and includes the nucleus accumbens and striatal portions of the olfactory tubercle. About 2% of the striatal neurons are cholinergic. Most cholinergic neurons in the central nervous system make diffuse projections that sparsely innervate relatively broad areas. In the striatum, however, the cholinergic neurons are interneurons that provide very dense local innervation. The cholinergic interneurons provide an ongoing acetylcholine (ACh) signal by firing action potentials tonically at about 5 Hz. A high concentration of acetylcholinesterase in the striatum rapidly terminates the ACh signal, and thereby minimizes desensitization of nicotinic acetylcholine receptors. Among the many muscarinic and nicotinic striatal mechanisms, the ongoing nicotinic activity potently enhances dopamine release. This process is among those in the striatum that link the two extensive and dense local arbors of the cholinergic interneurons and dopaminergic afferent fibers. During a conditioned motor task, cholinergic interneurons respond with a pause in their tonic firing. It is reasonable to hypothesize that this pause in the cholinergic activity alters action potential dependent dopamine release. The correlated response of these two broad and dense neurotransmitter systems helps to coordinate the output of the striatum, and is likely to be an important process in sensorimotor planning and learning. © 2002 Wiley Periodicals, Inc. J Neurobiol 53: 590–605, 2002