The parasympathetic nervous system modulates hormone and digestive enzyme secretion from the pancreas. However, the mechanisms of neuroeffector transmission within the final parasympathetic pathway in the pancreas have not been elucidated. Here, we demonstrate that intrapancreatic cholinergic neurons are bona fide postganglionic neurons that functionally couple vagal input to target cells in the pancreas. In living pancreatic slices from various mice expressing genetically encoded sensors and actuators, we found that intrapancreatic neurons responded to cholinergic input via nicotinic and muscarinic M1 acetylcholine receptors. However, only muscarinic receptor signaling was necessary and sufficient to elicit responses in exocrine and endocrine target cells. We established that muscarinic receptor signaling in intrapancreatic neurons is linked to the potassium M-current, thus producing the sustained reverberating activity required to efficiently modulate insulin and glucagon secretion and elicit oscillatory responses in acinar cells. Whereas intrapancreatic neurons triggered responses in acinar cells without additional stimulation, they only primed and amplified hormone secretion already stimulated by changes in glucose levels. This mechanistic insight into how intrapancreatic neurons regulate pancreas function challenges canonical models of parasympathetic neurotransmission and is critical to understanding autonomic control of the pancreas. Article Highlights Neurotransmission mechanisms at the final parasympathetic pathway in the pancreas have not been elucidated. We manipulated and recorded neuronal and target cell responses in living pancreatic slices to assess how intrapancreatic neurons affect pancreatic cell function. Activating muscarinic receptor signaling in intrapancreatic neurons was required to trigger exocrine cell activity and modulate endocrine cell secretion. Our findings revise conventional models of parasympathetic neuronal control of pancreatic function.