Abstract-Vagus nerve stimulation (VNS) is an FDA approved treatment for drug-resistant epilepsy and depression.Recently, we demonstrated the capacity for repeatedly pairing sensory input with brief pulses of VNS to induce input specific reorganization in rat auditory cortex. This was subsequently used to reverse the pathological neural and perceptual correlates of hearing loss induced tinnitus. Despite its therapeutic potential, VNS mechanisms of action remain speculative. In this study, we report the acute effects of VNS on intra-cortical synchrony, excitability, and sensory processing in anesthetized rat auditory cortex. VNS significantly increased and decorrelated spontaneous multi-unit activity, and suppressed entrainment to repetitive noise burst stimulation at 6 -8 Hz but not after application of the muscarinic antagonist scopolamine. Collectively, these experiments demonstrate the capacity for VNS to acutely influence cortical synchrony and excitability and strengthen the hypothesis that acetylcholine and muscarinic receptors are involved in VNS mechanisms of action. These results are discussed with respect to their possible implications for sensory processing, neural plasticity, and epilepsy.