The cognitive function of the highly evolved dorsolateral prefrontal cortex (dlPFC) is greatly influenced by arousal state, and is gravely afflicted in disorders such as schizophrenia, where there are genetic insults in α7 nicotinic acetylcholine receptors (α7-nAChRs). A recent behavioral study indicates that ACh depletion from dlPFC markedly impairs working memory [Croxson PL, Kyriazis DA, Baxter MG (2011) Nat Neurosci 14(12):1510-1512]; however, little is known about how α7-nAChRs influence dlPFC cognitive circuits. Goldman-Rakic [Goldman-Rakic (1995) Neuron 14(3):477-485] discovered the circuit basis for working memory, whereby dlPFC pyramidal cells excite each other through glutamatergic NMDA receptor synapses to generate persistent network firing in the absence of sensory stimulation. Here we explore α7-nAChR localization and actions in primate dlPFC and find that they are enriched in glutamate network synapses, where they are essential for dlPFC persistent firing, with permissive effects on NMDA receptor actions. Blockade of α7-nAChRs markedly reduced, whereas low-dose stimulation selectively enhanced, neuronal representations of visual space. These findings in dlPFC contrast with the primary visual cortex, where nAChR blockade had no effect on neuronal firing [Herrero JL, et al. (2008) Nature 454(7208):1110-1114]. We additionally show that α7-nAChR stimulation is needed for NMDA actions, suggesting that it is key for the engagement of dlPFC circuits. As ACh is released in cortex during waking but not during deep sleep, these findings may explain how ACh shapes differing mental states during wakefulness vs. sleep. The results also explain why genetic insults to α7-nAChR would profoundly disrupt cognitive experience in patients with schizophrenia.