Background and purpose: Muscarinic receptors contribute to both the facilitation and inhibition of levodopa-induced dyskinesia operated by striatal cholinergic interneurons, although the receptor subtypes and the mechanisms involved have not been clearly identified. Also muscarinic receptors in substantia nigra reticulata, activated by cholinergic midbrain afferents, regulate striatal functions although their role in levodopa-induced dyskinesia remains to be proven. Here, we investigate whether striatal and nigral muscarinic M1 and/or M4 receptors modulate dyskinesia expression and the underlying striato-nigral GABAergic pathway activation in 6-hydroxydopamine hemilesioned rats. Experimental approach: Reverse microdialysis allowed to deliver the M1 and M4 preferential antagonists telenzepine, PD-102807, tropicamide and the selective M4 positive allosteric modulator VU0152100 in striatum or substantia nigra, while levodopa was administered systemically. Dyskinetic movements were monitored along with nigral GABA (and glutamate) and striatal glutamate levels, taken as neurochemical markers of striato-nigral pathway activation. Key results: Intrastriatal telenzepine, PD-102807 and tropicamide alleviated dyskinesia and inhibited nigral GABA and striatal glutamate release. This was partially replicated by intrastriatal VU0152100 that, however, failed to inhibit striatal glutamate. The M2 preferential antagonist AFDX-116, used to elevate striatal acetylcholine levels, blocked the behavioral and neurochemical effects of PD-102807. Intranigral VU0152100 prevented levodopa-induced dyskinesia and its neurochemical correlates whereas PD-102807 was ineffective. Conclusions and Implications: Striatal M1 and M4, likely postsynaptic, receptors facilitate dyskinesia and striato-nigral pathway activation. Striatal M4 receptors, possibly located presynaptically, also inhibit dyskinesia. Potentiation of striatal and nigral M4 transmission leads to powerful multilevel inhibition of striato-nigral pathway providing a new strategy to tackle dyskinesia.