Pyramidal neurons in layer 5 of the neocortex comprise two broad classes of projection neurons: corticofugal neurons, including corticopontine (CPn) neurons, and intratelencephalic neurons, including commissural/callosal (COM) neurons. These non-overlapping neuron subpopulations represent discrete cortical output channels contributing to perception, decision making and behaviour. CPn and COM neurons have distinct morphological and physiological characteristics, and divergent responses to modulatory transmitters such as serotonin and acetylcholine (ACh). To better understand how ACh regulates cortical output, in slices of mouse prefrontal cortex (PFC) we compared the responsivity of CPn and COM neurons to transient exposure to exogenous or endogenous ACh. In both neuron subtypes, exogenous ACh generated qualitatively similar biphasic responses in which brief hyperpolarization was followed by longer lasting enhancement of excitability. However, cholinergic inhibition was more pronounced in COM neurons, while excitatory responses were larger and longer lasting in CPn neurons. Similarly, optically triggered release of endogenous ACh from cholinergic terminals preferentially and persistently (for ∼40 s) enhanced the excitability of CPn neurons, but had little impact on COM neurons. Cholinergic excitation of CPn neurons involved at least three distinct ionic mechanisms: suppression of K 7 channels (the 'M-current'), activation of the calcium-dependent non-specific cation conductance underlying afterdepolarizations, and activation of what appears to be a calcium-sensitive but calcium-permeable non-specific cation conductance. Our findings demonstrate projection-specific selectivity in cholinergic signalling in the PFC, and suggest that transient release of ACh during behaviour will preferentially promote corticofugal output.