These experiments determined the mesolimbic modulation of cortical cholinergic transmission in a neurodevelopmental model of schizophrenia. Mesolimbic-cholinergic abnormalities are hypothesized to contribute to the cognitive deficits seen in schizophrenia. Stimulation of NMDA receptors in nucleus accumbens (NAC) increases acetylcholine (ACh) release in the prefrontal cortex (PFC), a mechanism recently demonstrated to contribute to the control of attentional performance. We determined the ability of intra-NAC administration of NMDA to increase prefrontal ACh levels in adult rats that had received bilateral infusions of tetrodotoxin (TTX) to transiently interrupt impulse flow in the ventral hippocampus (VH) during development. Rats received infusions of TTX or saline on postnatal day 7 (PD7) or day 32 (PD32), and the effects of NAC NMDA receptor stimulation on prefrontal cholinergic neurotransmission were assessed in adulthood. In animals treated as controls on PD7, NMDA increased prefrontal ACh levels by 121% above baseline. In contrast, PD7 infusions of TTX into the VH abolished the ability of NAC NMDA to activate prefrontal cholinergic neurotransmission (7% increase). In animals that received TTX infusions on PD32, NMDA-evoked cholinergic activity did not differ from controls, indicating a restricted, neonatal critical period during which VH TTX impacts the organization of mesolimbic-basal forebrain-cortical circuitry. Importantly, the failure of NAC NMDA to evoke cholinergic activity in rats treated with TTX on PD7 did not reflect a reduced excitability of corticopetal cholinergic neurons because administration of amphetamine produced similar elevations of prefrontal ACh levels in PD7 TTX and PD7 control animals. A third series of experiments demonstrated that the effects of PD7 TTX are a specific consequence of transient disruption of impulse flow in the VH. Intra-NAC NMDA evoked prefrontal ACh release in rats receiving TTX, on PD7, into the dorsal hippocampus (DH), basolateral amygdala, or NAC. Thus, impulse flow specifically within the VH, during a sensitive period of development, is necessary for the functional organization of a mesolimbic-cortical circuit known to mediate attentional control processes. Therefore, neonatal inactivation of VH represents an effective animal model for studying the basis of certain cognitive symptoms of schizophrenia.