The key pathological features of Alzheimer's disease include synaptic dysfunction, profound changes in the cholinergic system, and deposition of beta-amyloid peptides generated by proteolytic processing of the amyloid-beta precursor protein (APP). However, the pathways linking APP with synaptic activity and cholinergic neuronal function are poorly understood. We report here that APP is essential in regulating the presynaptic expression and activity of the high-affinity choline transporter (CHT), a molecule that mediates the rate-limiting step of cholinergic synaptic transmission in both the neuromuscular junction and central cholinergic neurons. Loss of APP leads to aberrant localization of CHT at the neuromuscular synapses and reduced CHT activity at cholinergic projections. At the cellular level, we show that APP and CHT can be found in Rab5-positive endosomal compartments and that APP affects CHT endocytosis. Furthermore, we demonstrate that APP interacts with CHT through the C-terminal domain, providing support for a specific and direct regulation of CHT by APP through protein-protein interactions. These results identify a physiological activity of APP in cholinergic neurons, and our data indicate that deregulation of APP function may contribute to cholinergic impairment and AD pathogenesis.