Postoperative delirium and cognitive dysfunction are phenomena that are associated with increases in morbidity, mortality, and resource utilization after surgery. This review scrutinized a number of studies in order to better characterize the biochemical basis for associated cognitive dysfunction and delirium, with particular focus paid to the interactions of the cholinergic system with innate immunity and how the modulation of the immune system contributes to associated neuroinflammation. Despite the clinical impact of postoperative cognitive dysfunction, evidence-based protocols for the prevention and treatment of these disorders are still lacking. Several previous trials have attempted to prevent or treat clinical manifestation by modulation of the cholinergic system with acetylcholinesterase inhibitors, the results of which have been largely ambiguous at best. As the biochemical basis of postoperative cognitive dysfunction becomes more clearly defined, future research into therapeutics based on immune modulation and treatment of neuroinflammation may prove to be very promising.