During slow-wave sleep (SWS) assemblies of cortical neurons exhibit bistable behaviour in that they simultaneously switch between more depolarised UP states and rather quiescent DOWN states (Steriade et al., 1993). In contrast, during rapid-eye-movement (REM) sleep or wakefulness the same neurons loose this synchronicity and are virtually constantly active and thus monostable. Cholinergic stimulation from subcortical structures has been linked to the abolition of the bistability that occurs in the transition from slow-wave sleep to REM sleep or wakefulness (Steriade et al., 2001). However, whether Acetylcholine (ACh) alone is capable of bringing about this change in attractor states and the precise mechanisms involved remains elusive. Using a novel in-vitro model of spontaneous network bistability in acute rat brain slices we can for the first time examine the isolated effect of cholinergic modulation on spontaneous network bistability. In whole cell patch clamp recordings from layer III entorhinal cortex principal cells we show that bath applied Acetylcholine (ACh, 50-200 nM) leads to a concentration-dependent and reversible increase in UP state duration (control: 7.2 ± 3.5 s vs 200 nM ACh: 42.3 ± 23.2 s vs wash: 10.3 ± 4.2 s; n = 5; p < 0.001; 2-way ANOVA) whilst DOWN states become shorter (control: 43.6 ± 27.2 s vs 200 nM ACh: 13.5 ± 3.9 s vs wash 37.5 ± 13.7 s; n = 5; p < 0.001; 2-way ANOVA). Increasing cholinergic modulation also leads to a reversible increase in cell firing (control: 1.24 ± 1.2 Hz vs 200 nM ACh: 3.25 ± 2.6 Hz vs wash: 2.79 ± 2.7 Hz; n = 4; p < 0.001; 2-way ANOVA) (all data presented as mean ± S.E.M.). Increasing ACh concentrations beyond 200 nM lead to a persistently active state, similar to those reported earlier in layer III and V entorhinal cortex principal cells (Tahvildari et al. 2007). Our results suggest that cholinergic tone alone may be sufficient to account for the switching between a bistable attractor state for synchronous network activity, as observed during SWS, and a monostable regime of less synchronous network activity, similar to that found in REM sleep or wakefulness.