Models of the neuronal mediation of psychotic symptoms traditionally have focused on aberrations in the regulation of mesolimbic dopaminergic neurons, via their telencephalic afferent connections, and on the impact of abnormal mesolimbic activity for functions of the ventral striatum and its pallidal-thalamic-cortical efferent circuitry. Repeated psychostimulant exposure models major aspects of the sensitized activity of ventral striatal dopaminergic transmission that is observed in patients exhibiting psychotic symptoms. Based on neuroanatomical, neurochemical, and behavioral data, the hypothesis that an abnormally reactive cortical cholinergic input system represents a necessary correlate of a sensitized mesolimbic dopaminergic system is discussed. Moreover, the abnormal cognitive mechanisms that contribute to the development of psychotic symptoms are attributed specifically to the aberrations in cortical cholinergic transmission and to its consequences on the top-down regulation of sensory and sensory-associational input functions. Experimental evidence from studies demonstrating repeated amphetamine-induced sensitization of cortical cholinergic transmission and the ability of antipsychotic drugs to normalize the activity of cortical cholinergic inputs, and from experiments indicating the attentional consequences of manipulations that increase the excitability of cortical cholinergic inputs, supports this hypothesis. Relevant human neuropathological and psychopharmacological data are discussed, and the implications of an abnormally regulated cortical cholinergic input system for pharmacological treatment strategies are addressed. Given the role of cortical cholinergic inputs in gating cortical information processing, even subtle changes in the regulation of this cortexwide input system that represent a necessary transsynaptic consequence of sensitized mesolimbic dopaminergic transmission profoundly contribute to the neuronal mediation of psychotic symptoms.