Cholinergic inputs from the basal forebrain regulate multiple olfactory bulb (OB) functions, including odor discrimination, perceptual learning, and short-term memory. Previous studies have shown that nicotinic cholinergic receptor activation sharpens mitral cell chemoreceptive fields, likely via intraglomerular circuitry. Muscarinic cholinergic activation is less well understood, though muscarinic receptors are implicated in olfactory learning and in the regulation of synchronized oscillatory dynamics in hippocampus and cortex. To understand the mechanisms underlying cholinergic neuromodulation in OB, we developed a biophysical model of the OB neuronal network including both glomerular layer and external plexiform layer (EPL) computations and incorporating both nicotinic and muscarinic neuromodulatory effects. Our simulations show how nicotinic activation within glomerular circuits sharpens mitral cell chemoreceptive fields, even in the absence of EPL circuitry, but does not facilitate intrinsic oscillations or spike synchronization. In contrast, muscarinic receptor activation increases mitral cell spike synchronization and field oscillatory power by potentiating granule cell excitability and lateral inhibitory interactions within the EPL, but it has little effect on mitral cell firing rates and hence does not sharpen olfactory representations under a rate metric. These results are consistent with the theory that EPL interactions regulate the timing, rather than the existence, of mitral cell action potentials and perform their computations with respect to a spike timing-based metric. This general model suggests that the roles of nicotinic and muscarinic receptors in olfactory bulb are both distinct and complementary to one another, together regulating the effects of ascending cholinergic inputs on olfactory bulb transformations.