Although acetylcholine is one of the most widely studied neurotransmitters in the retina, many questions remain about its downstream signaling mechanisms. In this study we initially characterized the cholinergic neurotransmitter system in the salamander retina by localizing a variety of cholinergic markers. We then examined the link between both muscarinic and nicotinic receptor activation and nitric oxide production by using immunocytochemistry for cyclic guanosine monophosphate (cGMP) as an indicator. We found a large increase in cGMP-like immunoreactivity (cGMP-LI) in the inner retina in response to muscarinic (but not nicotinic) receptor activation. Based on the amplification of mRNA transcripts, receptor immunocytochemistry, and the use of selective antagonists, we identified these receptors as M2 muscarinic receptors. Using double-labeling techniques, we established that these increases in cGMP-LI were seen in GABAergic but not cholinergic amacrine cells, and that the increases were blocked by inhibitors of nitric oxide production. The creation of nitric oxide in response to cholinergic receptor activation may provide a mechanism for modulating the well-known mutual interactions of acetylcholine-glycine-GABA in the inner retina. As GABA and glycine are the primary inhibitory neurotransmitters in the retina, signaling pathways that modulate their levels or release will have major implications for the processing of complex stimuli by the retina. © 2008 Wiley-Liss, Inc.