In this work we investigate in a computational model how cholinergic inputs to the olfactory bulb (OB) and piriform cortex (PC) modulate odor representations. We use experimental data derived from different physiological studies of ACh modulation of the bulbar and cortical circuitry and the interaction between these two areas. The results presented here indicate that cholinergic modulation in the OB significantly increases contrast and synchronization in mitral cell output. Each of these effects is derived from distinct neuronal interactions, with different groups of interneurons playing different roles. Both bulbar modulation effects contribute to more stable learned representations in PC, with pyramidal networks trained with cholinergic-modulated inputs from the bulb exhibiting more robust learning than those trained with unmodulated bulbar inputs. This increased robustness is evidenced as better recovery of memories from corrupted patterns and lower-concentration inputs as well as increased memory capacity.