There is accumulating evidence that the dorsomedial striatum plays a significant role in the learning of a new response pattern and the inhibiting of old response patterns when conditions demand a shift in strategies. This paper proposes that activity of cholinergic neurons in the dorsomedial striatum is critical for enabling behavioral flexibility when there is a change in task contingencies. Recent experimental findings are provided supporting this idea. Measuring acetylcholine efflux from the dorsomedial striatum during the acquisition and reversal learning of a spatial discrimination shows that acetylcholine efflux selectively increases during reversal learning as a rat begins to learn a newly reinforced spatial location, but returns to near basal levels when a rat reliably executes the new choice pattern. Experimental findings are also described indicating that the blockade of muscarinic cholinergic receptors in the dorsomedial striatum does not impair acquisition of an egocentric response discrimination, but impairs reversal learning of an egocentric response discrimination. Based on these results, increased cholinergic activity at muscarinic receptors is part of a neurochemical process in the dorsomedial striatum that allows inhibition of a previously relevant response pattern while learning a new response pattern. In situations that demand behavioral flexibility, muscarinic cholinergic activity in the dorsomedial striatum may directly influence corticostriatal plasticity to produce changes in response patterns.