We investigated the role of acetylcholine (ACh) during encoding and retrieval of tone/shock-induced fear conditioning with the aim of testing Hasselmo's cholinergic modulation model of encoding and retrieval using a task sensitive to hippocampal disruption. Lesions of the hippocampus impair acquisition and retention of contextual conditioning with no effect on tone conditioning. Cholinergic antagonists also impair acquisition of contextual conditioning. Saline, scopolamine, or physostigmine was administered directly into the CA3 subregion of the hippocampus 10 min before rats were trained on a tone/shock-induced fear conditioning paradigm. Freezing behavior was used as the measure of learning. The scopolamine group froze significantly less during acquisition to the context relative to controls. The scopolamine group also froze less to the context test administered 24 h posttraining. A finer analysis of the data revealed that scopolamine disrupted encoding but not retrieval. The physostigmine group initially froze less during acquisition to the context, although this was not significantly different from controls. During the context test, the physostigmine group froze less initially but quickly matched the freezing levels of controls. A finer analysis of the data indicated that physostigmine disrupted retrieval but not encoding. These results suggest that increased ACh levels are necessary for encoding new spatial contexts, whereas decreased ACh levels are necessary for retrieving previously learned spatial contexts.Cholinergic antagonists disrupt the acquisition of many spatial tasks that are also sensitive to hippocampal disruption, including, but not limited to, place navigation in a water-maze (Hagan et al. 1987), Hebb-Williams maze (Rogers and Kesner 2003), and contextual fear conditioning (Young et al. 1995;Wallenstein and Vago 2001). During tone/shock-induced fear conditioning, a conditioned stimulus (CS; tone) is paired with an unconditioned stimulus (US; shock). The unconditioned response (UR; freezing) is associated with the CS, producing a conditioned response (CR; freezing). Kim and Fanselow (1992) found that during tone/ shock conditioning, rats also froze to the context in which the shock was administered. In addition, hippocampal lesions abolished this effect. Additional data from Philips and LeDoux (1992) demonstrated that this type of conditioning, called "contextual conditioning" requires an intact hippocampus, whereas tone/ shock associations require an intact amygdala. Hippocampal function is required in order to associate a set of independent features, or "context" (Rudy and O'Reilly 2001), with an aversive stimulus (i.e., foot-shock).Computational models of hippocampal function, namely those of Hasselmo and colleagues (Hasselmo and Bower 1993;Hasselmo 1995a Hasselmo ,b, 1999 Hasselmo and McClelland 1999) and Rolls (1996Rolls ( , 1989, suggest that the hippocampus, in particular the CA3 subregion, participates in the processes of encoding and retrieval. According to Hasselmo (1995aHasselmo ...