θ (4–12 Hz) and γ (40–90) oscillations are prominent rhythms in the mammalian brain. A striking feature of these rhythms, possibly vital to memory encoding, is their specific coordination in a manner that has been termed ‘nesting’, i.e. the preferred occurrence of bouts of γ activity during specific phases of θ. Both rhythms are shaped by the neuromodulator acetylcholine, but it is unknown to what degree their coordination is influenced by cholinergic neuromodulation. Here, we investigated the effects of a blockade of muscarinic acetylcholine receptors by atropine on θ and γ oscillations, and their interaction, in mouse hippocampus in vivo. Multi-site recordings from area CA1 of freely moving mice showed that under control conditions γ activity was amplitude-modulated at θ frequencies. This coordination of θ and γ oscillations, as assessed by cross-correlation of θ with the γ envelope, was prominent in basal and apical dendritic laminae but not in intermediate laminae. It was stronger during active exploration than during awake immobility. Atropine (50 mg/kg intraperitoneal) altered several aspects of the individual and nested rhythms. It rendered θ activity irregular, decreased θ oscillation frequency and reduced γ power. Atropine also reduced the amplitude-modulation of γ oscillations at θ frequencies, in part by perturbing the coordination of the rhythms on a short time scale. Thus, our findings demonstrate that phase locking of the amplitude of γ oscillations to θ in hippocampal area CA1 is partially governed by neuronal elements harbouring muscarinic receptors.