Early coordinated network activity promotes the development of cortical structures. Although these early activity patterns have been recently characterized with respect to their developmental, spatial and dynamic properties, the cellular mechanisms by which specific neuronal populations trigger coordinated activity in the neonatal cerebral cortex are still poorly understood. Here we characterize the cellular and molecular processes leading to generation of network activity during early postnatal development. We show that the somatosensory cortex of newborn rats expresses cholinergic-driven calcium transients which are synchronized within the deeply located subplate. Correspondingly, endogenous or agonist-induced activation of predominantly m1/m5-assembled muscarinic acetylcholine receptors elicits bursts of action potentials (up states) as a result of suprathreshold activation of the subplate. Tonic activation by ambient nonsynaptically released gamma-amino butyric acid (GABA) facilitates the generation of up states in the neonatal cortex. Additionally, this network activity critically depends on neuronal gap junctions but not on glutamatergic or GABAergic synaptic transmission. Thus, an early circuit relying on the integrative function of the subplate as well as on cholinergic-driven tonic GABA depolarization and tight electrical coupling is able to generate coordinated network activity, which may shape the architecture and control the function of the developing cerebral cortex.