ACh release into the rodent prefrontal cortex is predictive of successful performance of cue detection tasks, yet the cellular mechanisms underlying cholinergic modulation of cortical function are not fully understood. Prolonged ("tonic") muscarinic ACh receptor (mAChR) activation increases the excitability of cortical pyramidal neurons, whereas transient ("phasic") mAChR activation generates inhibitory and/or excitatory responses, depending on neuron subtype. These cholinergic effects result from activation of "M1-like" mAChRs (M1, M3, and M5 receptors), but the specific receptor subtypes involved are not known. We recorded from cortical pyramidal neurons from wild-type mice and mice lacking M1, M3, and/or M5 receptors to determine the relative contribution of M1-like mAChRs to cholinergic signaling in the mouse prefrontal cortex. Wild-type neurons in layer 5 were excited by tonic mAChR stimulation, and had biphasic inhibitory followed by excitatory, responses to phasic ACh application. Pyramidal neurons in layer 2/3 were substantially less responsive to tonic and phasic cholinergic input. Cholinergic effects were largely absent in neurons from mice lacking M1 receptors, but most were robust in neurons lacking M3, M5, or both M3 and M5 receptors. The exception was tonic cholinergic suppression of the afterhyperpolarization in layer 5 neurons, which was absent in cells lacking either M1 or M3 receptors. Finally, we confirm a role for M1 receptors in behavior by demonstrating cue detection deficits in M1-lacking mice. Together, our results demonstrate that M1 receptors facilitate cue detection behaviors and are both necessary and sufficient for most direct effects of ACh on pyramidal neuron excitability.