Acetylcholine (ACh) signalling plays a critical role in complex prefrontal-dependent cognitive processes, including attention and learning and memory. Different subtypes of nicotinic ACh receptors (nAChR) within the medial prefrontal cortex (mPFC), including homomeric α7 receptors and heteromeric α4β2 receptors, mediate the effects of ACh. While these different nAChR subtypes have been functionally characterized within the mPFC, there are conflicting reports in the literature that suggest a more complex functional expression within the mPFC and other cortical regions. Within the brain, nAChRs are modulated by exogenous and endogenous ligands, including neurosteroids. Previously, ex-vivo studies in reduced preparations have demonstrated that neurosteroids inhibit the ability of ACh to activate the nAChRs. Progesterone-derived neurosteroid allopregnanolone (ALLO) is produced de-novo in the brain. The functional properties of ALLO in the brain have been thoroughly characterized. It has been demonstrated that ALLO acts as a positive allosteric modulator of GABAA receptors and exerts rapid non-genomic effects on neuron function. GABAA receptors belong to the cys-loop class of ionotropic receptors, including nAChRs. The effects of ALLO on nAChRs and nAChR-facilitated synaptic plasticity in acute brain slice preparations are not fully understood. The studies presented in this thesis explore these questions with an emphasis on the neurosteroid modulation of nicotinic signalling and nAChR-facilitated synaptic plasticity. The first research Chapter demonstrates that distinct nAChR subtypes exhibit differential functional expression on electrophysiologically and morphologically distinct subtypes of pyramidal neurons within layer 5 of the mPFC in juvenile mice. The second research Chapter demonstrates that the functional expression of distinct nAChR subtypes changes dramatically within layer 5 of the mPFC in adult mice. Lastly, the third research Chapter demonstrates that ALLO negatively modulates α7 nAChR function indirectly by means of intracellular signalling cascades and subsequently inhibits the expression of α7 nAChR-facilitated long-term potentiation within layer 5 of the mPFC. This thesis represents the first comprehensive investigation into the mechanism of action ALLO within the mPFC. Collectively, the results from this thesis highlight a potential mechanism by which ALLO modulates α7 nAChR function and α7 nAChR-facilitated synaptic plasticity within the mPFC. The findings of this thesis have implications for disorders including postpartum depression, attention deficit hyperactivity disorder, and schizophrenia.