The cholinergic system is one of the most important modulatory neurotransmitter systems in the brain and controls activities that depend on selective attention, which are an essential component of conscious awareness. Psychopharmacological and pathological evidence supports the concept of a ‘cholinergic component' of conscious awareness. Drugs that antagonize muscarinic receptors induce hallucinations and reduce the level of consciousness, while the nicotinic receptor is implicated as being involved in the mechanism of action of general (inhalational) anaesthetics. In degenerative diseases of the brain, alterations in consciousness are associated with regional deficits in the cholinergic system. In Alzheimer's disease (AD), there is a loss of explicit (more than implicit) memory and hypoactivity of cholinergic projections to the hippocampus and cortex, while the visual hallucinations experienced by subjects with Dementia with Lewy bodies (DLB) are associated with reductions in neocortical ACh-related activity. In Parkinson's disease, the additional loss of pedunculopontine cholinergic neurones, which control REM (rapid eye movement) sleep or dreaming, is likely to contribute to REM abnormalities, which also occur in DLB. Widespread basal-forebrain and rostral brainstem cholinergic pathways, which include converging projections to the thalamus, appear to be located strategically for generating and integrating conscious awareness. Alleviation of a range of cognitive and non-cognitive symptoms by drugs that modulate the cholinergic system, which are being developed for the treatment of AD and related disorders, could be caused by changes in consciousness.