The functional role of cholinergic input in the modulation of sensory responses was studied using a combination of in vivo and in vitro electrophysiology supplemented by mathematical modeling. The electrosensory system of weakly electric fish recognizes different environmental stimuli by their unique alteration of a self-generated electric field. Variations in the patterns of stimuli are primarily distinguished based on their frequency. Pyramidal neurons in the electrosensory lateral line lobe (ELL) are often tuned to respond to specific input frequencies. Alterations in the tuning of the pyramidal neurons may allow weakly electric fish to preferentially select for certain stimuli. Here we show that muscarinic receptor activation in vivo enhances the excitability, burst firing, and subsequently the response of pyramidal cells to naturalistic sensory input. Through a combination of in vitro electrophysiology and mathematical modeling, we reveal that this enhanced excitability and bursting likely results from the down-regulation of an A-type potassium current. Further, we provide an explanation of the mechanism by which these currents can mediate frequency tuning.