Dysfunction of basal forebrain cholinergic neurons (BFCNs) is an early pathological hallmark of Alzheimer's disease (AD). Numerous studies have indicated that nerve growth factor (NGF) supports survival and phenotypic differentiation of BFCNs. Consistent with a potential link to AD pathogenesis, TrkA, a NGF receptor, is expressed in cholinergic forebrain neuronal populations including those in BF and striatum, and is markedly reduced in individuals with mild cognitive impairment (MCI) without dementia and early-stage AD. To investigate the role of TrkA in the development, connectivity, and function of the BF cholinergic system and its contribution to AD pathology, we have generated a forebrain-specific conditional TrkA knock-out mouse line. Our findings show a key role for TrkA signaling in establishing the BF cholinergic circuitry through the ERK pathway, and demonstrate that the normal developmental increase of choline acetyltransferase expression becomes critically dependent on TrkA signaling before neuronal connections are established. Moreover, the anatomical and physiological deficits caused by lack of TrkA signaling in BFCNs have selective impact on cognitive activity. These data demonstrate that TrkA loss results in cholinergic BF dysfunction and cognitive decline that is reminiscent of MCI and early AD.