Previously published theoretical models of olfactory processing suggest that cholinergic modulatory inputs to the olfactory system should be regulated by neural activity in the olfactory bulb. We tested these predictions using in vivo electrophysiology in rats. We show that the activity of approximately 20% of neurons recorded in the horizontal limb of the diagonal band of Broca (HDB), which is the source of cholinergic projections to the olfactory system, can be modulated by electrical stimulation of either the lateral olfactory tract or the cell body layer of piriform cortex. These data suggest a possible physiological pathway for the proposed regulation of neural activity in the HDB by activity in the olfactory bulb or cortex.