Neocortical choline acetyltransferase (ChAT)-expressing interneurons are a subclass of vasoactive intestinal peptide (ChAT-VIP) neurons of which circuit and behavioural function are unknown. Here, we show that ChAT-VIP neurons directly excite neighbouring neurons in several layers through fast synaptic transmission of acetylcholine (ACh) in rodent medial prefrontal cortex (mPFC). Both interneurons in layers (L)1–3 as well as pyramidal neurons in L2/3 and L6 receive direct inputs from ChAT-VIP neurons mediated by fast cholinergic transmission. A fraction (10–20%) of postsynaptic neurons that received cholinergic input from ChAT-VIP interneurons also received GABAergic input from these neurons. In contrast to regular VIP interneurons, ChAT-VIP neurons did not disinhibit pyramidal neurons. Finally, we show that activity of these neurons is relevant for behaviour and they control attention behaviour distinctly from basal forebrain ACh inputs. Thus, ChAT-VIP neurons are a local source of cortical ACh that directly excite neurons throughout cortical layers and contribute to attention.