Basal forebrain cholinergic neurons play an important role in cognitive functions such as learning and memory, and they are affected in several neurodegenerative diseases, including Alzheimer disease and Down syndrome. Despite their functional importance, the molecular mechanisms of functional maturation and maintenance of these cholinergic neurons after the differentiation stage have not been fully elucidated. This study demonstrates that the LIM homeobox 8 (Lhx8) transcription factor regulates cholinergic function in rat septal cholinergic neurons in primary cultures from E18.5 embryos and in the adult brain. Lhx8 expression modulated tropomyosin receptor kinase A (TrkA) expression in septal cholinergic neurons in vitro and in vivo, resulting in regulated acetylcholine release as an index of cholinergic function. In addition, Lhx8 expression and function were regulated by nerve growth factor (NGF), and the effect of NGF was potentiated by Lhx8-induced TrkA expression. Together, our findings suggest that positive feedback regulation between Lhx8, TrkA, and NGF is an important regulatory mechanism for cholinergic functions of the septum.