The M1 and M4 muscarinic acetylcholine receptors represent promising therapeutic targets for Alzheimer disease and schizophrenia. However, the development of agents targeting these receptors has been limited by their adverse cholinergic effects. Here, Tobin discusses how recent advances in the field — including an increased understanding of receptor biology and signalling, as well as the application of structure-based drug design — are enabling a new generation of muscarinic receptor modulators to enter clinical development.