The effects of chronic ethanol treatment (CET) on cholinergic modulation of CA1 evoked field potentials and recurrent inhibition were investigated in rat hippocampal slices. Densities of muscarinic receptor subtypes were quantified in remaining hippocampal tissue by immunoprecipitation. Iontophoretic application of ACh in stratum pyramidale results in facilitation of single evoked population spikes; application in stratum radiatum results in depression of field EPSPs. CET decreased cholinergic facilitation of population spikes, while cholinergic inhibition of field EPSPs remained unaffected. Integrity of feedback (recurrent) inhibitory circuitry was evaluated by paired-pulse stimulation. As previously demonstrated, recurrent inhibition was significantly reduced after CET; cholinergic disinhibition was also significantly reduced. Thus, CET appears to disrupt a subset of cholinergic effector systems within hippocampal neurons. The reductions in cholinergic function produced by CET does not appear to be due to receptor loss, since muscarinic receptor subtype densities were not found to be significantly altered in this tissue. These results support the hypothesis that muscarinic receptor function is impaired in CA1 pyramidal cells through a disruption of intracellular signal transduction mechanisms. While it is unclear whether cholinergic function is reduced in interneurons directly, these results suggest that modulation of neuronal firing in the hippocampus is markedly altered following CET due to impairment of both cholinergic and GABAergic systems.