Caffeine is a widely self-administered psychostimulant with purported neuroprotective and procognitive effects in rodent models of aging. The cholinergic basal forebrain is important for arousal and attention and is implicated in age-related cognitive decline. Accordingly, we determined the effects of caffeine on cholinergic neuron activation in the rat basal forebrain. Young adult (age 2 months) male rats were treated with caffeine (0, 10, or 50 mg/kg) and killed 2 h later. Caffeine significantly increased c-Fos expression in cholinergic neurons of the horizontal limb of the diagonal band of Broca but not other basal forebrain regions such as the medial septum or substantia innominata. The horizontal limb of the diagonal band of Broca provides cholinergic innervation to the olfactory bulb, suggesting that deficits in this structure may contribute to diminished olfactory function observed in Alzheimer's disease patients. These results suggest that part of the cognitive-enhancing effects of caffeine may be mediated through activation of this part of the cholinergic basal forebrain.