The basal forebrain (BF) houses major ascending projections to the entire neocortex that have long been implicated in arousal, learning, and attention. The disruption of the BF has been linked with major neurological disorders, such as coma and Alzheimer's disease, as well as in normal cognitive aging. Although it is best known for its cholinergic neurons, the BF is in fact an anatomically and neurochemically complex structure. Recent studies using transgenic mouse lines to target specific BF cell types have led to a renaissance in the study of the BF and are beginning to yield new insights about cell-type-specific circuit mechanisms during behavior. These approaches enable us to determine the behavioral conditions under which cholinergic and noncholinergic BF neurons are activated and how they control cortical processing to influence behavior. Here we discuss recent advances that have expanded our knowledge about this poorly understood brain region and laid the foundation for future cell-type-specific manipulations to modulate arousal, attention, and cortical plasticity in neurological disorders.