Specification of neurotransmitter phenotype is critical for neural circuit development and is influenced by intrinsic and extrinsic factors. Recent findings in rat hypothalamus in vitro suggest the role of neurotransmitter glutamate in the regulation of cholinergic phenotype. Here we extended our previous studies on the mechanisms of glutamate-dependent regulation of cholinergic phenotypic properties in hypothalamic neurons. Using immunocytochemistry, electrophysiology, and calcium imaging, we demonstrate that hypothalamic expression of choline acetyltransferase (the cholinergic marker) and responsiveness of neurons to acetylcholine (ACh) receptor agonists increase during chronic administration of an NMDA receptor blocker, MK-801, in developing rats in vivo and genetic and pharmacological inactivation of NMDA receptors in mouse and rat developing neuronal cultures. In hypothalamic cultures, an inactivation of NMDA receptors also induces ACh-dependent synaptic activity, as well as an inactivation of PKA, ERK/MAPK, CREB and NF-kB, that are known to be regulated by NMDA receptors. Interestingly, the increase in cholinergic properties in developing neurons that is induced by NMDA receptor blockade is prevented by the blockade of ACh receptors, suggesting that function of ACh receptors is required for the cholinergic up-regulation. Using dual recording of monosynaptic EPSCs, we further demonstrate that chronic inactivation of ionotropic glutamate receptors induces the cholinergic phenotype in a subset of glutamatergic neurons. The phenotypic switch is partial as ACh and glutamate are co-released. The results suggest that developing neurons may not only co-express multiple transmitter phenotypes, but can also change the phenotypes following changes in signaling in neuronal circuits.