Motor stereotypy is a key symptom of various disorders such as Tourette's syndrome and punding. Administration of nicotine or cholinesterase inhibitors is effective in treating some of these symptoms. However, the role of cholinergic transmission in motor stereotypy remains unknown. During strong cocaine-induced motor stereotypy, we showed earlier that increased dopamine release results in decreased acetylcholine release in the territory of the dorsal striatum related to the prefrontal cortex. Here, we investigated the role of striatal cholinergic transmission in the arrest of motor stereotypy. Analysis of N-methyl-d-aspartic acid-evoked release of dopamine and acetylcholine during declining intensity of motor stereotypy revealed a dissociation between dopamine and acetylcholine release. Whereas dopamine release remained increased, the inhibition of acetylcholine release decreased, mirroring the time course of motor stereotypy. Furthermore, pharmacological treatments restoring striatal acetylcholine release (raclopride, dopamine D2 antagonist; intraperitoneal or local injection in prefrontal territory of the dorsal striatum) rapidly stopped motor stereotypy. In contrast, pharmacological treatments that blocked the post-synaptic effects of acetylcholine (scopolamine, muscarinic antagonist; intraperitoneal or striatal local injection) or induced degeneration of cholinergic interneurons (AF64A, cholinergic toxin) in the prefrontal territory of the dorsal striatum robustly prolonged the duration of strong motor stereotypy. Thus, we propose that restoration of cholinergic transmission in the prefrontal territory of the dorsal striatum plays a key role in the arrest of motor stereotypy.