Alzheimer's Disease (AD) is a neurodegenerative disorder that is characterized by extracellular deposits of amyloid-beta peptide (Abeta) and a severe depletion of the cholinergic system, although the relationship between these two events is poorly understood. In the neocortex, there is a loss of cholinergic fibers and receptors and a decrease of both choline acetyltransferase (ChAT) and acetylcholinesterase enzyme activities. The nucleus basalis of Meynert (NBM), which provides the major cholinergic input to the neocortex, undergoes profound neuron loss in AD. In the present study, we have examined the cholinergic alterations in amyloid precursor protein transgenic mice (APP23), a mouse model of cerebral beta-amyloidosis. In aged APP23 mice, our results reveal modest decreases in cortical cholinergic enzyme activity compared with age-matched wild-type mice. Total cholinergic fiber length was more severely affected, with 29 and 35% decreases in the neocortex of aged APP23 mice compared with age-matched wild-type mice and young transgenic mice, respectively. However, there was no loss of cholinergic basal forebrain neurons in these aged APP23 mice, suggesting that the cortical cholinergic deficit in APP23 mice is locally induced by the deposition of amyloid and is not caused by a loss of cholinergic basal forebrain neurons. To study the impact of cholinergic basal forebrain degeneration on cortical amyloid deposition, we performed unilateral NBM lesions in adult APP23 mice. Three to 8 months after lesioning, a 38% reduction in ChAT activity and significant cholinergic fiber loss were observed in the ipsilateral frontal cortex. There was a 19% decrease in Abeta levels of the ipsilateral compared with contralateral frontal cortex with no change in the ratio of Abeta40 to Abeta42. We conclude that the severe cholinergic deficit in AD is caused by both the loss of cholinergic basal forebrain neurons and locally by cerebral amyloidosis in the neocortex. Moreover, our results suggest that disruption of the basal cholinergic forebrain system does not promote cerebral amyloidosis in APP23 transgenic mice.