The modulation of cortex by acetylcholine (ACh) is typically thought to originate from long-range projections arising in the basal forebrain. However, a subset of VIP interneurons express ChAT, the synthetic enzyme for ACh, and are a potential local source of cortical ACh. Which neurotransmitters these VIP/ChAT interneurons (VCINs) release is unclear, and which post-synaptic cell types these transmitters target is not known. Using quantitative molecular analysis of VCIN pre-synaptic terminals, we show expression of the molecular machinery to release both ACh and GABA, with ACh release restricted to a subset of boutons. A systematic survey of potential post-synaptic cell types shows that VCINs release GABA primarily onto other inhibitory interneuron subtypes, while ACh neurotransmission is notably sparse, with most ACh release onto layer 1 interneurons and other VCINs. Therefore, VCINs are an alternative source of cortical ACh signaling that supplement GABA-mediated disinhibition with highly targeted excitation through ACh.