The basal forebrain (BF) controls sleep-wake cycles, attention and reward processing. Compared to cholinergic and GABAergic neurons, BF glutamatergic neurons are less well understood, due to difficulties in identification. Here, we use vesicular glutamate transporter 2 (vGluT2)-tdTomato mice, expressing a red fluorescent protein (tdTomato) in the major group of BF glutamatergic neurons (vGluT2+) to characterize their intrinsic electrical properties and cholinergic modulation. Whole-cell, patch-clamp recordings were made from vGluT2+ neurons in coronal BF slices. Most BF vGluT2+ neurons were small/medium sized (<20 μm), exhibited moderately sized H-currents and had a maximal firing frequency of ∼50 Hz. However, vGluT2+ neurons in dorsal BF (ventral pallidum) had larger H-currents and a higher maximal firing rate (83 Hz). A subset of BF vGluT2+ neurons exhibited burst/cluster firing. Most vGluT2+ neurons had low-threshold calcium spikes/currents. vGluT2+ neurons located in ventromedial regions of BF (in or adjacent to the horizontal limb of the diagonal band) were strongly hyperpolarized by the cholinergic agonist, carbachol, a finding apparently in conflict with their increased discharge during wakefulness/REM sleep and hypothesized role in wake-promotion. In contrast, most vGluT2+ neurons located in lateral BF (magnocellular preoptic area) or dorsal BF did not respond to carbachol. Our results suggest that BF glutamatergic neurons are heterogeneous and have morphological, electrical and pharmacological properties which distinguish them from BF cholinergic and GABAergic neurons. A subset of vGluT2+ neurons, possibly those neurons which project to reward-related areas such as the habenula, are hyperpolarized by cholinergic inputs, which may cause phasic inhibition during reward-related events.