A major challenge in developing schizophrenia pharmacotherapy is treating the different symptoms of this disorder, typically divided into positive, negative and cognitive symptoms. M₁/M₄ muscarinic acetylcholine receptor (mAChR) agonists have emerged as a promising therapeutic target, particularly for positive and cognitive symptoms. Here, we examined the activity of the M₁/M₄ mAChR-preferring agonist xanomeline in four pharmacological latent inhibition (LI) models. LI is the poorer conditioning to a stimulus previously experienced as irrelevant during repeated non-reinforced pre-exposure to that stimulus. No-drug controls displayed LI if non-reinforced pre-exposure to a tone was followed by weak, but not strong, conditioning (2 vs. 5 tone-shock pairings). Amphetamine (1 mg/kg)- or scopolamine (0.15 mg/kg)-treated rats failed to show LI with weak conditioning, whereas MK801 (0.05 mg/kg)- or scopolamine (1.5 mg/kg)-treated rats persisted in displaying LI with strong conditioning. Xanomeline (5 mg/kg, 15 mg/kg) reversed amphetamine- and scopolamine-induced LI disruption, effects considered predictive of activity against positive symptoms of schizophrenia. In addition, xanomeline alleviated MK801-induced abnormally persistent LI. Activity of xanomeline on NMDA antagonist-induced behaviour was demonstrated here for the first time and suggests that the drug is effective against negative/cognitive symptoms. Finally, xanomeline alleviated abnormally persistent LI induced by scopolamine, which was suggested to model antipsychotic drug-resistant cognitive impairments, providing further evidence for the cognition-enhancing capacity of xanomeline. Although the use of xanomeline in schizophrenia was discontinued due to cholinergic-related side-effects, our findings suggest that M₁/M₄ mAChR agonism should be an important target in drug development in schizophrenia, potentially beneficial for treatment of positive, negative and cognitive symptoms.