Muscarinic acetylcholine receptors (mAChRs) provide viable targets for the treatment of multiple central nervous system disorders. We have used cheminformatics and medicinal chemistry to develop new, highly selective M4 allosteric potentiators. VU10010, the lead compound, potentiates the M4 response to acetylcholine 47-fold while having no activity at other mAChR subtypes. This compound binds to an allosteric site on the receptor and increases affinity for acetylcholine and coupling to G proteins. Whole-cell patch clamp recordings revealed that selective potentiation of M4 with VU10010 increases carbachol-induced depression of transmission at excitatory but not inhibitory synapses in the hippocampus. The effect was not mimicked by an inactive analog of VU10010 and was absent in M4 knockout mice. Selective regulation of excitatory transmission by M4 suggests that targeting of individual mAChR subtypes could be used to differentially regulate specific aspects of mAChR modulation of function in this important forebrain structure.